Today many people are using credit cards. Credit cards are convenient way of payment for goods and services without having to carry money with you. You are probably one of those people that being bombarded with advertisements offering credit cards, have one or more credit cards. What you and most people don’t realise is that there are many alternatives to credit cards around.
One of those alternatives are Pre-Paid Credit Cards. Pre paid credit cards are much like pre paid mobile phones. You first deposit funds on the card and then spend it. Pre paid credit cards have many advantages. One of them is that you can limit the amount of money you can spend, something especially useful if you give your card to your children. Being able to spend as much as you deposit on the card can help you avoid having a negative balance. Other advantage is that if your pre paid credit card is ever stolen, there is a limit on how much money can you lose.
Another alternative are Debit Cards. Debit cards can be used anywhere where Credit Cards are used. The difference with credit cards are that they are connected to your bank account, so whey you buy something using a debit card the money is spend from your bank account, as opposed to the credit cards when you pay your expenses at the end of the month. A disadvantage of debit cards is that the fraud protection is worse than that of credit cards.
Secured credit cards are similar to debit cards in the fact that they are connected to your bank account, and you can have a line of credit based on you deposit. When you use the secured credit card you are not spending funds from your bank account, instead you are spending on credit which is based on the funds deposited on your bank account. You will need to pay expenses on your secured credit on the end of the month or you will face interest expenses if you don’t.
As an alternative to using credit cards for borrowing money you can get a loan. Loans are better way for borrowing money that the credit cards. By taking loan you are borrowing money at a better rate than using credit cards. You can apply for a loan when you want to buy something for predetermined price such as a car, or you need money for a home improvement, financing a business, mortgage etc. Loan companies and banks can borrow you money because they know why you need it and can set the monthly payments for you to repay the loan.
Another alternative for borrowing money other than credit cards are credit unions. Credit unions are local, co-operative, owned by their members and run by the community. Credit unions are limited by law in the interest they can charge and since they don’t have shareholders, they are not required to make profit. Because of this reasons credit unions are excellent place to borrow money from. You should go to one in your area if there are any.