Credit Card Alternatives
When some of my bankruptcy clients learn that they have to disclose all of their creditors on their petition, they become concerned about the one or two credit cards they want to keep. I usually recommend that they get rid of all credit cards so they can get a complete fresh start. Without credit cards, how can one order plane tickets or reserve hotel rooms? There are some non-credit card options available for people who need to make travel reservations and online purchases.
Bill Me Later: There are a lot of stores and travel providers that offer the option to order a product or service and pay for it later through Bill Me Later. Instead of issuing a credit line, the company extends credit for each transaction. Typically, full payment must be made within 90 days in order to avoid finance charges. This is a safe way to shop online and is a good option when you don’t want use a credit card.
Visa Check Card: Most banks offer Visa check cards with their checking accounts. You can use it like a regular credit card. The only difference is that the money is deducted from your checking account. Like regular credit cards, you are protected from unauthorized charges. The merchant doesn’t need to know that it’s attached to your checking account. When making reservations or purchases, you just provide your account number and tell them your paying with a Visa card.
Paypal: Paypal offers a secure way to shop without exposing your financial information. Money can be deducted from your bank account or credit card without providing account information to the merchant. You can even use Paypal to transfer money to a friend or family member’s bank account. You are protected from unauthorized payments transferred from your account.
Prepaid Credit Card: This is used like a Visa check card, but is an option if you don’t have checking account. You deposit money on the card and can use it until the money runs out. Unlike the Visa check card, there are typically fees for making deposits.