Are you one of those individuals who only ever got a credit card for the convenience of being able to pay without money, or because you weren't informed of any other simple way to borrow money. Millions of us are, thanks to the inevitable advertising of the credit card industry, and few individuals realise just how many alternatives to credit cards there are. Let's take a look at a few.
Debit Cards.
Debit cards are frequently used in numerous European countries, but are more or less unknown of elsewhere. Basically, they're just like credit cards and are accepted everywhere credit cards are accepted, the single distinction is that they take any cash you pay out straight from your bank account, instead of you getting a invoice at the end of the month. You should be informed, though, that you aren't as well-protected from fraud with a debit card as you would be with a credit card.
Pre-Paid Credit Cards.
These are cards that work similar to credit cards, except that you can't keep a negative balance ' you have to put cash on the card beforehand. That means that you 'top-up' the card, similar to using a cell phone. This is beneficial if you wish to understand how much you're spending, not to mention that you can even pass the cards to children. They're also safer than debit cards, since someone who stole the card could only spend whatever cash was on it at the time.
Bank Overdrafts.
A adequate bank overdraft, used together with a credit card, can be a far superior way of borrowing cash than using a credit card. Your overdraft limit is set by the bank according to how much you gets paid into your account each month, and you are not required to pay it off until you want to.
Basically, it just gives your account the ability to go into minus numbers, if you want it to. Numerous banks charge somewhat high interest rates for overdrafts, but seldom as high as a credit card ' and they will give much superior rates for satisfactory customers.
Real Loans.
When you're buying one big item at a set amount (like a car), or you're going to spend all the cash on one kind of item (home improvements, for example), it's worth budgeting it all out and going to a bank or another loan company. They'll be able to loan you the cash at a much better rate than a credit card would, merely because they understand why you're taking the loan and can set regular monthly payments for you to repay it.
Credit Unions.
Credit unions are similar to 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. This is because there are limits in law on how much interest credit unions can charge, and they are not required to make a profit for owners or shareholders, because they don't have any. It's well worth checking if there's one in your area.
Source: http://www.ArticlePros.com/author.php?Cassandra Stinchcombe
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