Credit Cards For People Who Do Not Want To Be In Debt

There are six main ways in which people can use a credit card and also stay out of debt at the same time.  Many people who wish to avoid debt completely also stay away from credit cards completely, but this isn’t really necessary.  Check out these clever ways to avoid debt which still utilising the convenience and ease of credit cards, either for everyday purchases or simply to stash away for emergencies.

1. Prepaid credit cards

Prepaid credit cards make some people ask, “What is the point?” because they seem to defeat the purpose of “credit” – but the fantastic thing about them is that they can be used in any instance where a regular credit card could have been used.  So for online shopping, payments, and real-life stores where a credit card would be better than using your regular EFTPOS banking account, a prepaid credit card can be really useful.

Prepaid credit cards also do not hit you with the same fees as regular credit cards.  You don’t have interest rates, you don’t have annual fees and you don’t have to undergo credit checks to get hold of one of these cards.  They are preloaded with the amount of money which you designate, paid for upfront, and are not linked to your bank account or any credit account – so there’s simply no way you can overspend using one.

2. Get a credit card with the same financial institution as your main banking account

Here’s an option for those who want a regular credit card, not a prepaid credit card, yet are afraid of getting into debt.  The solution is to get a credit card with the same financial institution as your main bank account, so that you can regularly log into your netbanking account and see your credit card’s balance frequently.  This way you can quickly make a payment on your credit card every time you see a negative balance, ensuring that you never accrue a large debt.  This option is really only suited to diligent people.  To use this method you ought first to be reasonably good with your regular finances.

3. Set yourself a low credit limit

Credit limits catch many lot of people out – because credit cards make spending feel “free”.  So if the credit limit is up sky-high, some people will find themselves spending up sky-high and then being shocked by the massive repayments afterwards.  The smart credit card user – the person who doesn’t want a debt hanging over their head – sets a low credit limit on their credit card.  This is ideally less than 50% of your income.  You know that you’ll always be able to pay it off with the income you have.  In this way, your credit card spending is limited to what you can afford to spend – and your debt is limited too.  Simple, but effective.

4. Emergency credit card for people who do not want to use their credit card except for emergencies

Some people want a credit card simply for emergencies.  Although it’s debated whether or not a credit card is a good emergency plan, it can’t be denied that it’s possible to use a credit card in this way.  Therefore, if you want an emergency credit card, get one with no annual fees.  This way it won’t be costing you anything if you never use it!

5. Virtual credit card

A virtual credit card is a one-use credit card number which you purchase for the one-off purchase or transaction.  VCard is a trusted source of virtual credit cards, and is simple and easy to use.  The nice thing about a virtual credit card is that because it’s not an actual credit card, you don’t need to undergo credit checks to get one.  That’s because there’s no risk involved for anybody.  There’s no way you could get into debt with one.

You can see from this list that if you need to use a credit card, there are plenty of ways to do it without getting into a spiral of debt.  And as you most likely already know, it’s better to stay out of debt!

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