Credit Card Alternatives

Posted by Nick Niesen on October 29th, 2010

Credit cards are extremely convenient, but extremely costly. For those that would like the convenience of a credit card without the high costs involved there are many alternatives. Below, you will find a few.

Debit Cards
Debit cards have taken America by storm. They are extremely convenient just like credit cards without the high interest fees. Debit cards are credit cards that use your bank account instead of an unsecured loan provided by a credit card company. Debit cards are extremely easy to use, are usually accepted everywhere a normal credit card is accepted and does not charge any interest for purchases.

The beauty of debit cards is that they use your checking account making it easy to refill your balance. Many credit cards come with online banking making it easy to keep tabs on your balance and easy to transfer money from another account to refill your checking account. Debit cards usually are very economical and cost nothing at the point of purchase to use. While some banks do charge a yearly or monthly fee, these fees are typically low and much more cost effective compared to high credit card interest fees.

Paypal for Online Purchases
For those that shop online, instead of using a credit card, look into other payment options such as Paypal. Paypal is very secure and uses your bank account or even debit card to make purchases online. Instead of giving a credit card number to a merchant, your bank account or debit card account information is securely held on Paypal?s network. Paypal pays the merchant directly, this way you never have to transfer bank or card information to unknown merchants. Paypal is also free to use for consumers.

Gift Cards
Instead of using a credit card, you can also use gift cards to make purchases. In fact, there are even Visa and American Express gift cards which can be used at practically all locations that accept these credit cards normally. The way these prepaid gift cards work is that you pay for a specific amount on the gift card upfront. This way you don?t have to pay any interest fees later on. Gift cards are mostly used for holiday gift giving, but many parents are now using these cards as tools to teach their kids how to use credit cards wisely.

With so many other alternatives, your high interest credit cards and the debt they can cause can be a thing of the past.