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.

There are five of the alternatives to credit cards listed below.

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.

If you are wondering what the differences are between the debit and credit cards, it is that the debit cards take money directly out of your bank account while credit cards bill you 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. Debit cards are also described as electronic checks.

Prepaid credit cards and regular credit cards work similarly, however, with pre-paid credit cards you are not allowed to carry any negative balances. 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 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.

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. Your bank account will be allowed to show negative numbers or a balance that is in the red. 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.

One of the most commonly used alternatives to credit cards are traditional loans. 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. 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. A credit union is just like a bank, but one that is more local; a credit union is a co-operative owned by it’s members and run by the community and it is a great place to borrow from. 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. When you have to borrow money, investigate the alternative to credit cards offered by a credit union.

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