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Choosing for a credit or debit card?
Debit Cards The debit card looks and feels the same as the standard credit card but works in significantly different ways. The most key difference is that you are not actually making you purchase on credit. That's because debit cards work in virtually the same way as credit cards at any checkout counter, but the money is taken directly out of your bank account at the point of sale. Because you are not using credit, there are no bills to pay at the end of the month. This can be a convenient and safer way to use cash without actually carrying cash on your person. Pre-Paid Credit Cards. These are cards that work just like credit cards, except that you can't have a negative balance – you have to put money on the card before you can spend it. That means that you 'top-up' the card, like you would with a mobile phone. This is good if you want to know how much you're spending, not to mention that you can even give the cards to children. They're also safer than debit cards, since someone who stole the card could only spend whatever money was on it at the time. Bank Overdrafts. A good bank overdraft, used together with a credit card, can be a far better way of borrowing money than using a credit card. Your overdraft limit is set by the bank according to how much you gets paid into your account each month, and you don't need to pay it off until you want to. Basically, it just gives your account the facility to go into minus numbers, if you want it to. Many banks charge relatively high interest rates for overdrafts, but rarely as high as a credit card – and they will give much better rates for good customers. Real Loans. When you're buying one big thing at a fixed price, or you're going to spend all the money on one type of thing (home improvements, for example), it's worth budgeting it all out and going to a bank or another loan company. They'll be able to lend you the money at a much better rate than a credit card company would, simply because they know why you're taking the loan and can set regular monthly payments for you to repay it. Credit Unions. Credit unions are like banks, only more local. They are co-operative, owned by their members and run by the community, and are a great place to borrow money. If you are a credit union member, or are eligible for membership, see what their card issuing terms are. Although they are no giving out cards with their eyes closed, they will often have more relaxed conditions for members. You no longer have to work for a specific company to be eligible to join a credit union. Look for credit unions in your community and see what their membership options are.
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