Did you get an easy credit card in college? Or, are you someone who got one for the convenience of being able to pay without cash? Not aware of other easy ways to borrow money?
Millions of us do this thanks to the unavoidable advertising of the credit card industry. Few people realize just how many alternatives to credit cards there are. There are others ways of using credit without finding yourself swimming in credit card debt.
Let's take a look at a few.
Debit Cards. Debit cards are often used in many European countries but are relatively unheard of elsewhere. Basically, they're just like credit cards and are accepted everywhere credit cards are accepted. The only (and big) difference is that they take any money you spend directly from your bank account instead of you getting a bill at the end of the month. You also avoid the accumulation of credit card debt using these types of cards. Be aware 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 just like credit cards except that you can't have a negative balance and you have to put money on the card before you can spend it. This card is great if you want to know how much you are spending not to mention that you have no recurring credit card debt each month. They're also safer than debit cards since someone who stole the card can only spend whatever money is on it at the time.
Bank Overdrafts. A good bank overdraft, used together with a credit card, can be a far better way of borrowing money than using a credit card alone. Your overdraft limit is set by the bank according to how much you deposit into your account each month plus you don't need to pay it off until you want to.
Basically, it just gives your account the ability to go into negative numbers. Many banks charge relatively high interest rates for overdrafts but rarely are these rates as high as a credit card. They will give much better rates for good customers.
Real Loans. When you're buying one big item at a fixed price (like a car) or spend all your money on one type of thing (home improvements, for example), it's worth budgeting it all out and going to a bank or a loan company. They'll be able to lend you the money at a much better rate than a credit card would simply because they know why you're taking the loan. They can set regular monthly payments for you to repay it.
Credit Unions. Credit unions are like banks, only more local. They are cooperatives, that is, owned by their members and run by the community. They are a great place to borrow money because there are limits in law on how much interest credit unions can charge. They also don't need it to make a profit for owners or shareholders, because they don't have any. They are well worth checking out if there is one in your area.
About the Author
Jay Jackson writes and lectures extensively on eliminating personal credit card debt and getting your paycheck and life back. His resources, articles and information are on his website. http://www.bustcreditcarddebt.com