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Do You Really Need A Credit Card?
By Michael D. Strauss
There's no doubt that cards have become almost ubiquitous in modern life, with most adults now having at least one open account, even if they don't carry a balance from month to month. Indeed, with the surge in online shopping and other types of online transaction, it might even seem to be obligatory to have a card if you want to fully participate in today's society.

However, there's also no doubt that cards can be a very dangerous thing if not treated with respect. Stories abound of people running up huge debts using their plastic, which they then find they can't service should their financial situations change. This kind of scenario, which can lead to huge problems such as foreclosure and bankruptcy, make a lot of people reluctant to take the risk and they decide not to have a card at all.

So how can you enjoy the benefits of a card without taking the risks? There are three main ways: debit cards, secured cards, and charge cards.

The first of these alternatives, debit cards, are fast becoming among the most popular kinds of payment method. At the point of payment, they are to all intents and purposes used identically to a card. The crucial difference is that a debit card is linked directly to the cardholders bank account, and the transaction will not be authorized unless the account holds sufficient funds to cover it. Once authorized, the money will leave the account either immediately or within a matter of days. Thus, there is no possibility of building up debts using the card, unless you have an overdraft agreement in place with the bank.

One drawback to debit cards is that they are sometimes not accepted as widely as ordinary cards, so this is where the second alternative, secured cards, come in. These cards, also known as prepaid cards, need to be 'loaded' with funds before you can use them, for which the card issuer will usually charge a small fee. Once the card account has a on it, the card can be used in exactly the same way as a normal card, and in all the same outlets, as it will usually carry the Mastercard or Visa logo. Secured cards, as well as being good for people who don't want to risk debt, are also an ideal way for people with bad ratings to get access to the convenience of plastic.

Unfortunately, having to load a secured card can be both tiresome and also relatively costly, so this is where the third alternative might be considered: charge cards.

This kind of card is somewhere



in between a debit card and an ordinary card. With a charge card you have a line of which you can dip into to fund your transactions, and there is no direct link between the card and your bank account. However, the total amount you spend each month must be repaid in full after every statement. You cannot carry a balance from month to month with a charge card, at least not without being penalized with hefty fees. For this reason they make perhaps the ideal choice for people who wish to carry a payment card with the least amount of hassle, and absolutely no risk of running up unsupportable debt.

Article Source: http://www.articlemap.com

Michael writes for the credit card site Card Sense, where you can read more about credit card alternatives along with other articles on related subjects.

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