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Most
people either personally own or at least know
about
credit cards.
Credit cards are small, rectangular pieces of
plastic that can be used to purchase items in
stores and on the Internet in place of cash. All
of the many different types of credit cards in
existence come with very specific and individual
credit terms and conditions that state when
payments must be made on credit balances, how much
interest must be paid on out-standing credit
balances, and what will happen to a credit card
holder if payments are not made on time – which
usually consists of the need to pay late fees.
Credit cards have, over the course of several
decades, become the preferred method of payment
for individuals across the Untied States and even
the entire world because they are easy to use,
convenient, relatively simple to obtain, and they
can allow for purchases that would otherwise be
unaffordable. In most cases, credit cards are
beneficial and a true asset to the economy.
However, when credit cards are abused by being
used too often and to purchase items that are
extremely expensive, consumers can get themselves
into a heap of financial trouble. The most common
problems that people have with credit cards are
that they charge much more than they can afford,
and become severely in debt. It can take some
people years to recover from high credit card
balances.
A good alternative for individuals who either have
bad credit or who do not want to own the
responsibility that comes along with a credit card
are prepaid
charge cards
or
debit cards.
The basic concept behind a prepaid
charge card
is that it does not allow a person to spend money
they do not have, while still providing the
convenience of the small, rectangular piece of
plastic that is so much more convenient than cash.
A pre-paid charge card is associated with an
account that has money in it. Each time the
pre-paid charge card is used, money is
electronically withdrawn from that account. The
account holder can add money to their pre-paid
charge account at any time, or money can be
automatically transferred from another a separate
account on a scheduled basis. Normally, the charge
card agency charges the account holder a small fee
each time the card is used or they may charge a
small monthly fee. Sometimes, there are no fees
associated with the card at all.
Prime candidates for pre-paid charge cards are
people who have owned a credit card and have
developed bad credit, young adults who have never
owned a credit card and need practice, parents who
want to give a card to their children but do not
trust them with official credit, and people who
never seem to have cash on hand.
One of the best aspects of most pre-paid charge
cards is that they look very similar (if not
identical) to regular credit cards. Therefore, if
a person has a pre-paid charge card due to the
fact that he or she has bad credit, people who see
the card will probably not know the difference.
Debit cards are very similar to pre-paid charge
cards except that they are normally associated
with a persons regular checking or savings account
at their local bank. While a
debit card
may have a Visa or
MasterCard
logo on it, when the credit card is used, money is
automatically withdrawn from the person’s checking
or savings account.
Debit cards may or may not have fees associated
with them, and the terms and conditions associated
with debit cards will vary depending on a person’s
bank. Often, banks offer good deals on debit cards
if a person agrees to have his or her regular
payroll check directly deposited into their
checking or savings account on a bi-weekly or
monthly basis.
Before deciding on a regular credit card, a
pre-paid charge card or a debit card, check out
all of the available options available via the
Internet and local banks. There are hundreds of
options, and there is sure to be an alternative
that fits best with any individual’s needs.
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