You may not realize that there are several alternatives to the credit cards offered by mail and those annoying phone calls you receive right at dinner time.

Listed here below are five of those alternatives to credit cards.

Debit cards are something that has been used as an alternative to credit cards for many years in several European countries, but only in recent times elsewhere. Debit cards are accepted in most of the places where credit cards are accepted, so they can be used in a similar way.

The one big difference between these two cards is that instead of getting a bill at the end of the month, debit cards take the money directly out of your bank account. You should know that you aren’t as well-protected from fraud with a debit card as you will 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. You deposit money into your card’s account before you can use it, which means that you ‘top-up’ the card, like you do with pre-paid cell phones. This could be a great method of controlling spending and you might even consider giving one to your child to control their spending. Credit cards that are pre-paid can also be safer than debit cards, because if it is stolen the thieves can just spend the money that is on it.

Bank Overdrafts-used in conjunction with a credit card, can be a far better way of borrowing money than using a credit card. Your overdraft limit is set by your bank according to how much you deposit into your account each month and you don’t need to pay it off until you want to. This allows you to let your bank account go into the red or have a negative balance. A great number of the banks charge relatively high overdraft interest rates, however, they are not usually as high as those charged by credit card companies and when you are considered to be one of their better customers, you will likely receive even better rates from your bank.

Another alternative to credit cards are the traditional loans. Helping with the financing of your dreams of home improvements and new cars will come easier and cheaper when you contact a bank or another type of lender. If you consult with these types of lenders they will be able to extend a loan to you at a much better rate of interest than a credit card company’s and they can help you set up a repayment plan to better fit your budget.

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.

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