I would love to write down what I think about credit cards, but Shania Twain beat me to it: “we’ve created us a credit card mess/ we spend the money that we don’t possess.” (Ka-Ching!, great song.)
Credit cards got my parents into debt and almost drove a very good friend of mine over the edge. All right, you might say credit cards don’t get into debt, people get into debt. Sure, sure, there are multiple ways to look at everything. The point is, by the time I reached my thirtieth birthday, I knew better than to rely on a credit card. The problem was, I didn’t know there were other credit card alternatives that would function in the modern shopping world short of carrying cash and risking getting mugged at gunpoint (I live in New York, you see).
Not a Well Known Fact
I know now that many people don’t know there are credit card alternatives. Advertising certainly plays a part in this kind of misinformation. I remember back when we were in college, local banks used to send us all these direct mail pamphlets, urging to sign up for a “student” credit card. A lot of good that did.
My point is, there are actual, real-life credit card alternatives and they are so much better when it comes to handling hard-earned money.
First option that comes to my mind is debit/check cards, pieces of plastic that offers all the convenience of a credit card without the stifling interest rate. Unlike with a credit card where a bank essentially lends you money monthly for expenses, debit cards are funded from a cardholder’s own funds. I switched to debit cards as soon as I heard about them. To open my current checking account, I had to make a down payment of 100 bucks (this was a while ago) and maintain a certain monthly balance. I can pay with my check cards at stores and Amazon just like with a debit card and no interest is charged. I have my monthly salary automatically deposited to my checking account, and life is easy peasy.
As with anything, there are cons. If you upgrade your checking account to handle large sums of money, you might have to pay a maintenance fee. Some banks may charge ATM fees also. A big problem is if someone steals your card, they can withdraw all your money from an ATM and you’ll have to bear the loss if you wait to report for more than 60 days. For credit cards, this is limited to $50, regardless of reporting time.
The next best option among the many different credit card alternatives is charge cards, an old fashioned tool. They are like an opposite of debit cards, where instead of depositing money at the beginning of the month, you are allowed to pay off your bills at the end of a month without an interest fee. I haven’t personally used one, but I’ve heard great things about them from several co-workers who rely on them. The full amount has to be paid at the end of the month, and no grace periods are allowed as for a credit card. A big con is that some companies charge an annual fee (along with certain rewards).
If you are really repelled by all sorts of cards, sorry, you’ll have to stick to good ‘ol cash, the best of the credit card alternatives, which is not such a bad idea if you can carry the bills safely.
What alternatives to credit cards do you use?