Having a credit card is not always feasible for people with overspending tendencies. It is also difficult to apply for a new credit card with a bad credit score. The process of applying for a credit card is also very complex.
Debts, Interest rates, additional fees can be avoided using credit card alternatives.There are many credit card alternatives available which can be used as a short-term solution. The alternative credit card methods work more or less the same way.
In this article, I will provide you with all the available alternatives to credit cards which you can use to carry your digital money. Let us find out:
6 Best Credit Card Alternatives:
Here I give you the details information about the 6 best credit card alternatives that will surely make your borrowing easier:
1. Debit Cards:
This is one of the best alternatives to credit cards as you can carry the money in your digital wallet. The main advantages of using a debit card is that you do not have to pay any extra fees or interest rates based on your purchases as the money is subtracted straight from your account. You can also withdraw cash from your nearest ATM booth with your debit card.
However, the fraud protection of debit cards is not as secure as credit cards. The compensation money is very less than what you will get on credit cards. The reporting time of fraudulent activity to get your account back is also very short which is a major issue.
Be careful while using debit cards as an alternative otherwise you will find yourself into similar trouble as of using credit cards.
2. Bank OverDraft:
You can also use this bank draft option as an alternative to credit cards. In order to avail such services, it is very important that you have a good reputation and the issuer or bank can rely on you to repay the money. Bank overdraft is the extra money borrowed from your bank using your current account.
Always make sure to discuss the interest rates for your repayment with your issuers or bank. Some issuers will allow this facility with 0% interest rates, but it all depends and varies from person to person.
Failing to pay the borrowed amount on time can result in huge interest rates. For an emergency concern, this is the best alternative to credit cards.
If you have the tendency to shop online, this is the best option for you. Paypal accounts are the most convenient way to use your digital money all over the world and are also affiliated with millions of websites. The account provides a lot of security and is also used to send and transfer money with ease.
The account is very secured as well and it will prevent you from any kinds of fraudulent activity and defective products as well. The paypal account is connected with your current account just like your debit cards.
The money used is instantly deducted from your bank account as you will not face any hassle of paying extra money or interests. They have also introduced a new paypal debit system, where anything you purchase has a cash back offer of 1%.
4. Digital Wallet:
Digital wallets give the consumers the convenience of shopping straight from their smartphones with accounts like Google Wallet, Cash App, Apple Pay, Walmart pay etc. The digital wallets can also be connected with your debit cards, bank accounts providing the relevant information.
The money can be transferred from your bank account as well when you are short of cash in your e-wallet. This option is very useful as an alternative to credit cards as you do not have to carry any cash or cards with you. There is no fear of your card getting stolen or damaged.
However, it is your responsibility to be aware and careful as you may lose your phone as well. Always protect your digital accounts with strict passwords and pin codes to avoid your account from getting hacked.
5. Personal Loans:
You can apply for a short-term loan to your bank or issuer as an alternative to credit cards. This method is applicable if you are unable to issue a credit card and personal loans are the best short-term solutions.
If you want to give yourself a break or want to buy some new furniture and home appliances, a personal loan is the best way to avoid unnecessary interest rates and charges.
However, it all depends on the issuer or bank the amount of money they will provide you as a loan. If you have a good reputation and good credit score the procedure will be easy and the interest rates will be considered by your issuer.
Another great solution as an alternative to credit cards only if you can repay the borrowed amount on time.
6. Secured Loan:
This is an advanced form of loan known as secured loan which is usually given against the consumer’s fixed assets like their house, cars etc. People with a very poor credit score can also avail this type of loans.
Secured loans are very risky business as failing to repay the loan in due time can result in huge losses. The issuer will take away the house or cars that were given as a security for the loan.
Another form of secured loan is the guarantors loan, where a family member or friend will assure or lend credit score on behalf of the loanee. This credit card alternative is usually used for young students or people not yet developing a good credit score.
It is recommended repaying the loans in due time as failing to pay the borrowed money will affect or put your guarantors into pressure. He or she will be responsible and liable for your inability to pay the loan.
In today’s world it is not difficult to find an alternate solution for credit cards. There are so many options to choose from, just make sure to repay the debts in due time to avoid any complications.
If you find this article informative regarding the substitutes of credit cards or have any queries related to credit cards, feel free to comment down below or write to us.