More Credit Card Options
If you are not interested in the credit card offers that seem to come in a constant stream through the mail and by way of solicitors on the phone, there are viable alternatives to consider.
Here are five alternatives to credit cards.
Debit cards are one alternative to credit cards that has been in operation for a number of years in many European countries, but are relatively new in other places. Debit cards are accepted in most of the places where credit cards are accepted, so they can be used in a similar way.
The biggest difference between the two cards is that debit cards take money directly from your bank account rather than you getting a bill at the end of the month. You must be made aware of the fact that you may not be as well protected against fraud with a debit card as you would with a credit card. A different name for debit cards is electronic checks.
Prepaid credit cards do not allow you to carry a negative balance, although these cards work just like regular credit cards do. Before making purchases with a pre-paid credit card, you have to deposit money into your card’s account; this means that you have to ‘top-up’ the card like you do with a pre-paid cell phone. This is one way to control your spending or you may want to give one to a child to help control their spending. Pre-paid credit cards are also safer than debit cards, if stolen because they could only spend whatever money was on it.
Bank Overdrafts-used in conjunction with a credit card, can be a far better way of borrowing money than using a credit card. The bank will set the limits on your overdraft, based on the amount you deposit into your account each month and it does not have to be paid off until you want to pay it. This allows you to let your bank account go into the red or have a negative balance. Relatively high interest rates are charged for overdrafts by most banks, but they are generally not as high as a credit card company will charge; also when you are considered to one of the better customers, the rates could be better than ever.
Traditional loans are what many people use for financing instead of credit cards. If you are planning on purchasing a single big ticket item at a fixed price, such as home improvements or a new car, it is probably better to try to get financing for your dreams through a bank or some other type of lender. If you consult with these types of lenders they will be able to extend a loan to you at a much better rate of interest than a credit card company’s and they can help you set up a repayment plan to better fit your budget.
The last alternative to credit cards to be listed here is credit unions. Credit unions are very much like banks, only more local; they are formed as a co-operative and owned by their members and run by the community, thus they are a good place to borrow money. The reason is because there are laws that limit how much interest credit unions can charge and they don’t need to make a profit for owners or shareholders because they don’t have any. A credit union is one of the more solid alternatives to credit cards and well worth looking into if you need to borrow money.
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