Alternative Credit Cards Worthy of Consideration
We all know much about traditional credit cards. Those are the ones that are right in front of our faces in advertisements; the Visa, MasterCard, and Discover; as well as the use-practically-anywhere-and-get-on- with-your-day-kind-of-cards. However, those are not the only credit options out there. There is a wide variety of options from secured cards to prepaid cards and so on. Here, we will touch base on some secured options that most consumers do not even think about until it is set before them for one reason or another.
Bank Account Secured
This kind of credit card is a really good option for someone who is able to maintain a reasonable bank balance without overdrawing or overspending. It can help you to control your spending as well. This kind of credit card comes from your own bank and is secured by a deposit you have made into the bank account. The credit limit is equal to the deposit. If you can not make a payment, it comes out of your deposit, lessening the credit limit. This is great for those who have had tough financial times and are looking to rebuild their credit. However, don;t make it a waste of your time and your money. Make sure your card does not charge interest on purchases, has no annual fee and does report to the credit bureaus.
Home Secured
Consumers need to give this option a lot of thought before choosing. While it is, without a doubt, an easy form of credit for a homeowner to obtain, there can be dire consequences. A Home secured credit card is a card that is attached to your home equity line of credit. It is only for the most responsible and financially stable of consumers. You could easily lose you home if you fail to pay the bill. It’s not a bad idea, but not the best either. Consider the options carefully. An alternative might be to simply tap into your home equity credit line – minus the credit company and attached card – with a low interest rate. This option reduces your home’s equity until you pay it back, however, you do not risk your home itself.
Purchase Secured
If you frequently shop at a particular store, this might be a good option, given that you will pay the bill. Unlike the traditional credit card, store cards have their own qualifications and can often be somewhat difficult to obtain without an excellent credit rating. Of course, there are others who do not really check you credit, but extend the credit with collateral being based the same way. Purchase secured credit cards are store specific cards where the collateral for later payment is placed in the goods you buy. As long as you 0pay the bill, the goods are yours. Failure to pay the bill gives the store the right to repossess your purchases to try and resell to make back their money.
When it comes to credit, there are a lot of options. The important thing is to explore what is out there, choose what is right for you, make sure the option is reported to the credit bureaus and use it responsibly, paying that bill on time, so you will have the credit whenever you need it.
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