Alternatives to credit and debit cards

September 10, 2018
Credit and debit cards are a part of modern life. However, you do not have to see them as necessities. Instead, they are financial tools, and you can find alternatives to them if you know where to look. These alternatives can be vital if you have a low income or if you have a poor credit score. If a regular chequing account or standard credit cards are not available to you, you can use these alternatives.
Alternatives to credit and debit cards

Even if you can get a chequing account and a credit card, these alternatives could be useful tools for helping you control your spending.

Store charge cards

If you shop at the same store or same chain of stores often, you might want to consider a store charge card. These cards are slightly easier to obtain than regular credit cards. They may offer special perks, such as a 5% discount whenever you shop at the store. You may also qualify for exclusive cardholder sales. Such cards may or may not allow you to carry a balance from month to month. If you do maintain a balance, you may have to deal with interest charges, which would have a negative impact on your finances.

Therefore, if you can obtain and use a store charge card, you should always pay off the balance before the due date to avoid any interest charges.

Gift cards

An alternative to store charge cards is a store gift card. Why would you get a gift card? First, you can use the cards at the issuing retailer online. One of the main reasons that people need credit or debit cards is for online purchases. With a gift card, you can make online purchases without credit or debit. You buy the card with cash and then use it online. The advantage of this is that you will not run the risk of getting into debt because you will only spend money that you already have.

The other advantage of gift cards is that they rarely have any fees.

Prepaid debit cards

The most significant advantage of prepaid debit cards is that you can use them anywhere (unlike gift cards, you are not limited to one store or one chain with a prepaid debit card). On the negative side, however, you usually have to deal with monthly fees or load fees if you use a prepaid debit card.

Some cards may offer ways to avoid some or all fees, but this may be complicated. If you do not want to pay such fees, you should opt for a different alternative.

Online personal loans

Credit cards can help in an emergency or if you need a couple hundred dollars to make it to the end of the month. This convenient borrowing is a significant advantage. It is an advantage that you can also get with online personal loans. These loans are generally quite quick to obtain, and you can usually get cash within a day.

Even if you do not need money right now, you can familiarize yourself with online money suppliers so that you can be ready to borrow when you need cash quickly.