Getting your hands on a credit card offers a lot of advantages. One swipe can take care of your urgent purchases, especially if your paycheck is still a couple of weeks away.
Owning a credit card provides you financial flexibility. You can pay for an expensive item in 6-, 12-, or 24-months installments, and earn rewards in the process. However, not a lot of people get to enjoy the benefits of being a credit card holder.
A study shows that about 23% of millennials don’t have a credit card. If you’re not good at managing your money or your credit history doesn’t look great, this may hurt your chances of getting approved for a credit card. Fortunately, today’s technological innovation and modernization in the finance industry enables more inclusivity.
Credit Card Alternatives for People without a Credit Score
- Electronic wallets
Electronic wallets are also called digital wallets. These are apps that you can download on your smartphone and serve as your wallet. You can make transactions through the app, such as pay bills, send and receive money, buy load, transfer funds from one bank to another, and many more.
Opening an e-wallet account is easy. You only need to install the app, provide all necessary information, and verify your account to unlock more features.
- Prepaid cards
These cards work like debit cards—you have to top them up with your money to make cashless payments when you’re shopping online or in physical stores. Prepaid cards are built for people with nonexistent or poor credit history. The substitute credit card also serves as a safe alternative for those who have credit and spending problems.
- Cashback debit cards
If you’re unable to apply for a credit card but looking for an alternative that provides the same cashback perk, get a cashback debit card instead. Every time you use the debit card to pay for transactions with partner merchants, you earn some rebates to be credited to your debit card, which you can use for future purchases.
- Online lenders
Online loans from credible lending providers serve as a great alternative for unbanked individuals. They have a quick application and approval process, and anyone can apply for one as long as they have a phone and an internet connection. It’s a good option whenever you need cash for emergencies.
- Online pawning
Another credit card alternative that comes in handy when you need immediate cash is online pawning. You can get a loan in exchange for items like electronics and jewelry. Unlike traditional pawning, you can submit the photo of your exchange item along with the necessary details for appraisal, and then a pickup will be scheduled when approved. You can receive the loan on the same day.
Take Advantage of Modern Credit Card Alternatives
Millennials are more cautious about how they spend. They find getting in a vicious cycle of debt and having to pay debt for a long time terrifying, which makes it helpful to have credit card alternatives that prevent this from happening.
To further understand how the credit card alternatives above work, take a look at its accompanying infographic.