The constant steam of credit card offers you get through the mail and by phone tends to make you unaware of the other possible alternatives to credit cards.
Five of the alternative ways to pay for items other than credit cards are in the list below.
Debit cards are something that has been used as an alternative to credit cards for many years in several European countries, but only in recent times elsewhere. Debit cards are like credit cards in their looks and usage and are accepted at nearly every place where credit cards are accepted.
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 should know that you aren’t as well-protected from fraud with a debit card as you will be with a credit card. Debit cards are also described as electronic checks.
Prepaid credit cards - these cards work just like regular credit cards do, but you are not allowed to carry a negative balance. Just like with a pre-paid cell phone, you have to ‘top-up’ the card by depositing money into your card’s account before you can use the card for expenditures. This is a great way to control your spending or you could give one to a child to 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.
When used in conjunction with a credit card, bank overdrafts can be a far better way to borrow money than using a credit card. The limit on your overdraft is set by the bank; it will be set according to the amount you have deposited into your account each month and it does not have to paid off immediately, only when you want to do it. You will have the chance to let your bank account go into the red with a negative balance. Many banks charge relatively high interest rates for overdrafts, but they rarely are as high as a credit card company’s and the better customer you’re considered to be, the better rates you’ll receive from your bank.
Another alternative to credit cards are the traditional loans. Helping with the financing of your dreams of home improvements and new cars will come easier and cheaper when you contact a bank or another type of lender. They’ll be able to lend you the money at a much better rate than a credit card would, because they know why you’re taking the loan and they can set regular monthly payments for you to repay it.
Credit unions is the last alternative to credit cards to be listed in this article. Credit unions are similar to banks, they are just more local; they are owned by the members of a co-operative and run by the community and are a good place to borrow some money. Credit unions are a good place to borrow because there are laws that set limits on how much interest they can charge, since they don’t need to make a profit for the owners and shareholders, due to the fact that they do not 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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