Credit Card Alternatives

More people than ever have been denied continued use of their credit cards for a variety of reasons. But there is very little we can do today without a credit card. People needed credit cards for people with bad credit. Necessity activated the creative thinking of people. They discovered their bank debit card was the next best thing to owning a credit card. The reason for the shift was the 2008 Recession.

The 2008 Recession changed the financial face of the United States and the world. It changed the way we do business in this country for businesses and for individuals. A disproportional number of people with high credit report scores before the Recession now have poor credit report scores. This is not necessarily due to a lack to self discipline. It is the results of lost income for millions of people. They resorted to their last reserve, the credit card. Before long the credit cards were maxed out or suspended by the banks. And they resorted to using their debit cards. Once again they had what seemed like instant credit credit cards

Credit Cards

Credit cards and debit cards accomplish the same task but they are definitely different. The credit card is a convenience we have become accustomed to.The credit card is a set amount of credit issued by a bank to a consumer. The bank promises to pay for purchases up to that amount on behalf of the consumer.The individual pays the bank for the purchases. And the credit cards...

• are protected by the bank that issued the cards
• people may pay a portion or all of the balance due on the card within 30 days
• the consumer is protected from fraud if the lost or stolen cards are reported within 60 days
• a consumer is liable for up to $50 in credit card theft, if reported within 60 days of loss
  
• best for building good credit standing
• best for large or delicate purchases
• are good for handling purchase disputes
• easy to use for car rentals, hotel stays and restaurant transactions
  

Debit cards

The debit card is the same as using your checking account.Some merchants require a PIN when handling debit card transactions. Merchants have direct access to your checking account. And...

• a stolen debit card is only safe if the merchant requires a PIN to use it
• a person can easily over draw from their check account
  
• zero interest charged on account when using a debit card
• debit card cuts down on writing checks
• over charging on debit card could ruin your credit rating
• Car rentals, hotel stays and restaurant merchants authorize more on debit cards than the purchase amounts . It could take as long as 90 days to be credited for their authorized amounts over the purchase price.
  

When comparing the credit card with the debit card, they both have their advantages and disadvantages. The key to the decision to use one or the other is the credit rating of the individual. The individual with bad credit is most likely to use the debit card.

If that is the case, the debit card user is prone to experience more challenging credit problems from over drawn bank accounts. They are likely to have bad debt.Their objective for the debit card becomes a problem rather than a convenience. There is an alternative to using the debit card for individuals concerned about bank overdrafts.

The prepaid green dot cards are issued by MasterCard and VISA card. This may be the answer to the debit card concerns. The prepaid green dot cards have some of the conveniences of a regular credit card as well as the bank debit card. The characteristics of the prepaid green dot card includes...

• free transactions
• may be used at ATMs
• may be used where VISA and MasterCard debit cards are accepted
• safer than using the debit card
• no fee for direct deposit
• consumer may opt to receive free email and text alerts
• builds credit when used to pay bills
• may reload cards at over 100,000 locations
• there is no interest or over draft problems
• no over draft or penalty charges
• no contract
• interest free credit cards
• instant credit card approval
  

The green dot prepaid card is easy to acquire and easy to activate. They guarantee instant debit card approval. The individual only needs to purchase the activation package from a participating retailer. The retailer will charge a small activation fee and take the first cash load amount,a maximum of $500, for the card. The individual may use the activation temporary card as soon as the money is loaded onto the card.

The temporary card is only good for purchases but may not be reloaded. For a small fee, the retailer performs the first part of the activation process of the green dot debit card.The final activation step includes going online and contacting the MasterCard or Visa card sponsor. They will request your activation number which is on the purchase package. They will send you a Visa or Master card with your personal name and account number printed on the card. Once you receive your personalized card, it may be used the same as any debit card. The difference is, you will not be vulnerable to over drafts on your personal bank account. You can only use as much money as there is on the card.

The prepaid green dot debit card has the best attributes of the bank credit card and the debit card. The individual will have the opportunity to rebuild their credit while experiencing the convenience of the credit cards. Bills such as utilities and other credit purchases are paid with the card. The payments are reported to the national credit reporting agency, PRBC. Consequently, the credit score also increases. The individual's improved credit score will help when applying for employment, insurance and housing.