Five Alternatives To Traditional Credit Cards
Credit cards are a convenient way to complete payments using the internet to shop online or cover unexpected and emergency expenses. Unfortunately, there are some instances that can make it difficult for a consumer to get a credit card – such as bad credit or a lack of credit in the case of someone being new to the country. In these cases, there are many alternatives to credit cards that can be used for all of the purposes that a credit card is traditionally used for.
Here are five alternatives that can be used for credit cards:
Online Payment Systems
Online payment systems like Paypal allow the consumer to use these online payment systems to shop online and complete payment, while providing a viable alternative to credit cards. These payment systems are safe and secure and money can be added directly from the bank account to fund these purchases. There are over one million websites that allow the consumer to shop on the internet using their account, without ever requiring a credit card number.
Prepaid Credit Cards
Prepaid credit cards can be obtained from a variety of financial stores and shops. They can also be obtained on the internet to be given as gifts. These prepaid credit cards are loaded with a certain amount of money and can be replaced when this money has been spent. Prepaid credit cards allow the shopper to stay within a certain budget, and require no credit rating. They come with high fees, but can be instantly loaded and used after loading.
Secured Credit Cards
Secured credit cards are great for those consumers that have not been approved for a traditional credit card in which the credit limit is granted based on the credit score. Secured credit cards require a deposit which is equal to or less than the credit limit that is being provided and can be a great way to gain access to a credit card as well as developing and building the credit rating. Secured credit cards can be used just like a normal credit card, only the deposit is returned once the account has been in good standing or the account has been closed for an account that is non-secured.
Debit or Check Cards
Debit or check cards can be used like credit cards, but draw the money from the checking account rather than allowing a credit line which should be repaid at the end of the month. These are a great way to get credit card debt under control – and are a great alternative for those that find themselves easily attracted to the lures of credit use.
Temporary Credit Card Numbers
Many financial companies and online payment systems offer temporary credit card numbers which can be used to shop online at stores that do not accept the online payment systems.
Five Ways to Reduce the Interest Rate of Your Credit Card Debt
Reducing the interest rates that you are paying towards your credit card debt is a way to decrease the overall payment that is going to be repaid. Many consumers are unsure about where to start when it comes to reducing the interest rate; it is important to remember that there are many measures that can be taken to reduce the interest rate on your debt, including your credit cards.
Here are some ways that you can take advantage of these techniques and begin to decrease the interest date on the debts that you are repaying:
Call the Credit Card Company
Call the credit card company and ask for a lower interest rate. There are often three tiers of interest rates that are used when it comes to the cardholders accounts. Asking for a decreased interest rate could save you up to several hundred dollars per year. Once you have reached the customer service representative, ask about ways that you can qualify for a lower interest rating.
Keep Your Credit Rating High
Ensuring that your credit rating is kept high is an essential part of having privilege to lower interest rates. Be sure to make all payments on time and reduce the amounts of collections account on the credit file, as well as reducing the new credit that is applied for when you are trying to maintain the credit rating. Keeping your debt under thirty percent of the credit limits has also been a proven technique in lowering the credit rating and should be adhered to at all times.
Pay a Higher Annual Fee
One of the best ways to reduce the interest rating on the account is to pay a higher annual fee when it comes to the credit card. The annual fee that is paid for the credit card can reduce the interest rate, as the fees being charged on an annual basis can cover the decreased interest rate. If you are trying to avoid an annual fee, it is important to know that this can be associated with a higher interest rate.
Develop History with the Credit Card Company
There is many situations when consumers that have developed history with the company or consumers that have been using the credit card company for an extended period of time. These consumers often have access to lower interest rate or the ability to take part in loyalty programs that can help the consumer to obtain these lower interest rates.
Consider Balance Transfer
Credit card balance transfer, when used properly, can help the consumer to lower the overall credit card interest rates in the consumer’s portfolio. If the existing credit card debts are accruing a higher interest rate, consider transferring the debts to a new credit card which imposes a lower interest rate instead.
Reducing the interest rate that comes with credit card debt does not have to be rocket science. In most cases, a good credit rating combined with positive history can enable you to save hundreds of dollars per year on interest payments.