We all start off with the best intentions but let's face it, when times get tough it's easy to fall behind on payments. Before we know it our credit history has taken a nose dive and finding a credit card lender willing to put their faith in us becomes harder than finding a parking spot in a Westfield shopping centre.
The good news is, there are still options available for those who have fallen on hard times. The knight in shining credit card armour can come in the form of a debit card.
What is a debit card?
A debit card looks and acts like a standard credit card but instead of charging your purchases to credit it withdraws the money from your own existing funds. The benefits of this is that you don’t need a stellar credit history and it allows you to make purchases online, unlike standard savings account cards.
Don’t let you bad credit history stop you from pursuing financial freedom. Consider the other benefits of debit cards.
Peace of mind
You still get the peace of mind of popular credit cards, such as Visa and MasterCard, with their verification credit card services, but you gain the peace of mind knowing you are spending your own money and not going into credit card debt.
Online banking and purchasing
In today's Internet society it's often hard to get by without a credit card. Booking overseas trips, buying tickets and online shopping all need a credit card, so having a debit card provides you with that convenience while allowing you to spend only what you have in your bank account.
No monthly interest changes
A debit card can be a great savings tool as you are only spending what you physically have in your bank account and you don't have to deal with looming credit card interest rates.
Travel with ease
Travelling? Debit cards act in the same way as a credit card, so they are largely accepted world-wide, giving you access to your savings without having to make a withdrawal and accruing hefty withdrawal fees.
Need a personal loan but have a bad credit rating?
There are also options available for taking out a personal loan even if you have a bad credit rating. You can consider taking out a secured personal loan if you intend on spending the loan as a lump sum and paying it off slowly over time. Keep in mind your chances of approval will depend on several factors including your credit score, income, expenses and living situation. So if in doubt, or have a particularly questionable credit history, it may be best to speak to an expert such as a financial counsellor about your situation.
Secured personal loans require you to put up an asset, such as a car, which the bank can then use as collateral if you were to default on you repayments.
The benefits of a secured personal loan is it's often easier to obtain because it’s considered a lower risk for the lender. Also, as it's a lower risk they will often come with a lower interest rates, however your rate may vary based on your credit rating and other factors, as above.
Whatever your financial struggle RateCity offers a comprehensive range of credit card options for you to compare using our credit card comparison tool. To compare personal loans visit our personal loan comparison page.