5 Other Options To Credit Cards

Posted at by ifydcat on category Credit

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 – these cards have been used in many European countries for a number of years, but are relatively new elsewhere. Debit cards are like credit cards in their looks and usage and are accepted at nearly every place where credit cards are accepted.

A big difference between debit cards and credit cards is that debit cards just take the money directly from your bank account and credit cards send you a bill at the end of the month. You must be aware, however, that you will not be as well protected against fraud with a debit card as you would be 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. 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 could be a great method of controlling spending and you might even consider giving one to your 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. When you use a bank overdraft the bank sets the limit on it, in accordance with the amount you deposit into your account each month and you do not have to pay it off until you want to pay it off. It gives you the ability to have your account go into the red or negative numbers. A relatively high rate of interest is charged by many banks for an overdraft, although they are rarely as high as that charged by credit card companies and when the bank considers you to be one of their better customers, you may be given an even better overdraft interest rate.

Traditional Loans-these types of loans are one other alternative to credit cards. It is wise to contact a bank or another type of lender if you are planning to purchase a big ticket item like an automobile or improvements for the home to see if they can help with financing. These types of lenders will be able to lend the money to you at a much better interest rate than a credit card company would, since they know why you are needing the loan and they can set you up with regular monthly payments to repay it.

Credit unions is the last alternative to credit cards to be listed in this article. Credit unions are like banks, just more local; they are co-operative, owned by their members and run by the community and are a great place to borrow money. Credit unions do not have any owners or shareholders they want to make a profit for and they are limited by laws on how much interest they can charge borrowers, so this is a great place to borrow money. A credit union is one of the more solid alternatives to credit cards and well worth looking into if you need to borrow money.

Visit JSNet.org for more information on credit cards including great deals on credit cards for balance transfers



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