Convenient Alternatives to Credit Cards

If you’re not using cash or credit cards, how can you shop? You need to pay somehow. That's where credit card alternatives come in. Living without credit cards might be easier than you think—there are at least half a dozen alternatives you could use for everyday purchases.

Say your credit score is a bit low, so it’s hard to open a credit card. One smart move might be to open a secured card. You can often open a secured card with a lower credit score, and as you make timely payments, your credit score rises. Eventually, you might upgrade the card.

Managing debt is another great reason to avoid credit. Using a debit card is a natural budget hack—you can’t spend more than you have in your checking account. Sticking to debit could simplify your financial life. Fewer deadlines to track; no more feeling like you’re catching up on payments.

That’s not to say credit cards are easy to ditch. As people make more online purchases, credit cards can feel like a must-have—especially since they come with security guarantees like fraud protection, and they often reward you for spending. 

Even so, savvy shoppers are trending toward alternative payment methods. Buy Now, Pay Later (BNPL) makes it simple to split big purchases into small installments. Mobile payments apps add additional protections against fraud. These are perks credit cards don’t always offer.

Credit card alternatives offer you a ton of flexibility. You can mix and match cards with other ways to pay. It’s the sort of thing Freedom Debt Relief advocates for: making debt light and simple, so you can live the life you want.

What are Credit Card Alternatives?

Credit card alternatives are financial tools that let you shop without cash or traditional credit cards. Debit cards, Buy Now, Pay Later services, and other options can help steer you away from credit card debt while facilitating payments online and in-store.

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Why People Choose Credit Card Alternatives

Not everyone uses credit cards the same way—and not everyone benefits from them. Here are some of the most common motivations for seeking out alternatives:

Avoid interest charges: Carrying a balance almost always means paying high interest, sometimes over 20%. You might prefer debit cards, mobile wallets, or direct payment methods so you can avoid those extra costs. Sure, credit cards often reward you for swiping. But a single interest charge could wipe out those gains and then some.

Build or rebuild credit safely: If you’ve had challenges with late payments or maxed-out cards, secured credit cards or certain alternative cards could help you rebuild without the same risks as traditional cards. A secured card is relatively easy to open and generally offers little in the way of rewards, so there’s less temptation to swipe. You can cap your spending by offering a low deposit.

Freedom Debt Relief isn't a credit repair organization and doesn't provide or offer services or advice to repair, modify, or improve your credit.

Improve spending habits: Using cash, debit, or prepaid options forces you to live within your means, helping prevent overspending. It’s a little like a budget, except automatic and built-in. That’s good for not just the wallet, but the mind. Imagine no longer having to worry about whether you’ve made credit card payments—you’ve paid up-front, so you’re all good.

Overcome application rejections: Not everyone qualifies for a credit card, especially if they have a thin credit file or past credit issues. Alternatives offer access to essential payment tools without the scrutiny of a big approval process. There’s no approval process to use debit cards or payment apps. And if you need to open a credit line with bad credit, a secured card doesn’t carry the credit profile requirements of a standard credit card.

Recover from debt struggles: Many people who have experienced the stress of credit card debt are wary of going back. Alternatives could help them manage money while they focus on credit card debt relief. In fact, debt management plans (DMPs) typically ask you to stop using credit cards for the duration of the plan, making other options necessary.

Simplify finances: During debt repayment or financial reset periods, you might choose straightforward payment methods like debit or ACH transfers to avoid complicating your budget. It’s easy to manage money when you can see everything in one place, and if you stick to a single checking account, you get one dashboard with all your transactions.

Whatever your reason for considering them, the good news is that alternatives are more accessible, flexible, and convenient than ever.

Credit Card Alternatives: Summary

Debit card

A debit card is one of the best alternatives to credit cards. A debit card looks like a credit card, but lets you spend money from your linked checking account. There’s virtually no risk of going into debt since you’re only spending money that’s in your account. It’s possible to go into debt if you opt into overdrafts. 

Rewards: Some debit cards come with rewards programs similar to credit card programs, so you could earn cash back or perks for spending with the card. These programs aren’t usually as generous as the credit card version, but there’s little debt risk, itself a huge reward.

Security: Debit cards don’t usually provide the same level of fraud protection as credit cards. Look for banks that offer zero-liability policies for unauthorized charges, and always monitor your account closely.

Fees: Open checking accounts with low or no monthly fees to keep your debit card use inexpensive. Debit cards sometimes charge overdraft fees for attempting to withdraw more money than exists in your connected account. To avoid overdrafting and causing a negative bank account balance, keep close track of your spending. A budget can help.

Debit card pros and cons:

• Money comes directly from your checking account

• Low debt risk

• Less flexible than credit card

• Not reported to the credit bureaus.

Debit cards keep your spending tied directly to your available cash, helping you stay in control and avoid future debt.

Reloadable prepaid cards

Traditional bank-issued debit cards connect to your checking account, while prepaid debit cards let you load funds ahead of time. Prepaid cards could be especially helpful if you’re trying to stick to a strict budget, or if you don’t have a traditional bank account.

Reloadable prepaid cards can be used wherever credit cards are accepted. These don’t expose you to the risk of debt. You can load a prepaid card with funds online, with cash at the register, or with money in your checking account.

Where to find them: Search for prepaid cards wherever gift cards are sold (such as grocery stores and pharmacies), or buy these credit card alternatives online from issuers like Visa, Mastercard, and American Express.

Fees: You may have to pay transaction fees when you swipe at ATMs, and fees to reload the cards with more funds. For example, the Bluebird Prepaid Debit Card doesn’t charge a fee to withdraw money at MoneyPASS ATMs, but you pay $2.50 per transaction (along with any ATM operator fees) to use it at other ATMs. 

Research could help you find a prepaid card with the best terms and lowest fees. For example, some prepaid cards are protected from loss and theft under certain conditions, while others aren't. 

Credit impact: Prepaid cards don’t help or hurt your credit. In fact, you don’t even have to identify yourself when you buy one.

Reloadable prepaid card pros and cons:

• You can spend with a preloaded card

• Zero debt risk when swiping

• Much less flexible than credit card

• Not reported to the credit bureaus.

Buy Now, Pay Later (BNPL) services

BNPL services like Afterpay and Klarna are short-term loans that split your purchase into chunks you pay every two weeks. Many BNPL loans are interest-free. You usually link your bank account to make payments automatically. If you pay late, you may be charged fees. 

BNPL services are credit card alternatives for online purchases, but can stress your budget. Even though a BNPL service charges you zero interest on timely payments, it’s still debt. You want to be in a strong position financially when the bill comes due—or more like when three or four bills come due, in this case.

BNPL pros and cons:

• Split payments into four or more installments

• Extremely flexible, with a predictable and automatic payment plan

• Late/missed payments  typically incur heavy interest charges and fees.

Mobile payment options (Apple Pay, Google Pay, PayPal)

Mobile wallets such as Apple Pay, Google Pay, and Samsung Pay have surged in popularity because they combine convenience with security. Unlike swiping a card, mobile payments often use tokenization and biometric verification (fingerprints or facial recognition), making them safer for in-person and online transactions.

How it works: You make purchases with a digital wallet linked to a debit card, prepaid card, or checking account. Your card or account details are stored on your digital wallet. This is convenient, as you could carry around all your linked cards just by having your phone on you. Many stores let you check out with technology that lets you tap your phone instead of swiping a card. 

Flexible: For freelancers and small business owners, mobile apps such as PayPal, Venmo, or Cash App offer fast, flexible ways to accept payments or transfer money. Many also integrate with budgeting tools, helping you track spending in real time, instead of doing it manually.

International travel: If you travel internationally, mobile payment options may also reduce the hassle of carrying foreign cash or paying conversion fees, since many apps work globally. With their security and flexibility, mobile payments are more than just convenient—they’re becoming a mainstream alternative to traditional credit.

Mobile payment options pros and cons:

• Choose your payment option at checkout

• Convenient and secure

• Requires linked account(s).

Peer-to-peer lending

Peer-to-peer (P2P) loans work by connecting borrowers with everyday people who want to lend money to earn a profit. P2P loans collect money from pools of people willing to lend, and pass it along to borrowers. The P2P lender collects the monthly payments and distributes the money to the investors who funded the loan.

Traditionally, P2P loans were available to people with poor credit who didn’t qualify for other loans. That sometimes made them an excellent alternative to credit cards. 

In recent years, P2P loans have become scarcer, because most major lenders have stopped offering this service. As of early 2025, Prosper and Kiva still offer P2P loans. Other P2P lenders have largely switched to personal loans and business loans.

Peer-to-peer lending pros and cons:

• Might qualify with a lower credit score

• Few options available.

Cryptocurrency

Cryptocurrencies like Bitcoin could be used as alternatives to credit cards. These digital assets can be traded back and forth like regular money. You can open a digital wallet and store cryptocurrency as you would in a bank account. 

Crypto is easy to access, but it’s unregulated and uninsured by the federal government. That means there’s little to no protection from scams. If your account is compromised or you fall victim to a scam, you usually have to fend for yourself.

Cryptocurrency pros and cons:

• Easy to open a wallet and get started

• Lots of scams and little protection.

Alternative Credit Cards for Bad Credit

Secured and student cards could help you build credit.

Secured cards

It’s possible to build credit with a secured card. A secured credit card is one that requires a security deposit as collateral (something the lender can keep if you fail to repay the debt). It’s not prepayment for your transactions. 

You use the card like any other credit card. The credit limit is usually equal to the amount of your deposit. If you want a higher credit limit, you can make a larger deposit. 

Like with a regular card, you get a monthly statement. If you have a balance, you make just the minimum payment, or pay more. If you don’t pay off the card each month, you pay interest on the amount you owe.  If you fail to pay as agreed, the credit card issuer can keep your deposit. 

Most secured credit cards report to the credit bureaus. Keeping your balance low and making consistent, on-time payments could boost your credit profile. For this reason, secured credit cards are often great credit card alternatives for improving your credit score.

Secured credit card pros and cons:

• Spend as flexibly with a secured card as with an unsecured card

• Potential to help you build credit

• Must put down an initial deposit to spend.

You can find secured credit card options no matter your credit score range.

Student cards

You could build credit with student cards. A student credit card is designed for students, who often have little to no credit history. It’s typically easier for a college student to open a student card than to open a regular unsecured card. 

A student card offers many of the same perks unsecured cards do: rewards for swiping, and zero deposit. The main difference is that rewards are designed specifically for students, and you can sometimes upgrade student cards upon graduation.

You must be a college student with proof of enrollment to open a student card.

Student card pros and cons:

• Designed for students with zero credit history

• Offers rewards

• Requires proof of college enrollment to open.

Choosing the Right Alternative for Your Situation

With so many options available, the best alternative depends on your financial situation and goals.

If you have good credit but want to avoid debt: Debit cards, mobile wallets, and Buy Now Pay Later could offer convenience without interest charges. Sure, BNPL does charge late fees, but payments are structured, so you pay in full by default. In other words, you have a strong incentive to pay the full balance on schedule—unlike credit card minimum payments that make it easier to delay.

If you’re rebuilding credit: Secured credit cards may be the right fit. A secured card is the easiest credit line to open with bad credit. You could easily cap spending by putting down a small deposit, which doubles as your spending cap.

If you’re focused on budgeting: Prepaid debit cards or cash-based systems could help limit overspending. You can’t overdraw a prepaid debt card. In the same vein, some regular debt cards prevent you from overdrafting, bouncing payments instead of charging you overdraft fees. 

If you’re working toward long-term goals: Combining alternatives—for example, using a secured card to rebuild credit while relying on debit for daily spending—can balance safety and growth. You could build your score while paying mostly with debit or cash.

What works best for you depends on whether your priority is credit, convenience, or control. By aligning your choice with your financial goals, you’ll make alternatives work for you.

Perks of Using Credit Card Alternatives

Better budgeting and spending habits are perks of credit card alternatives. 

Budgeting: Debit cards and prepaid cards automatically cap spending, denying attempts to spend more than your balance. That makes it difficult to go into debt. You can avoid stressing about the late payment and interest charges credit card users face.

Banks charge you overdraft fees when you spend more than you have in your account. Debit cards disable overdrafts on one-time purchases by default, but there are still instances in which your bank may charge you for attempting to spend above your balance.

Spending habits: Debit cards, prepaid cards, and secured credit cards make it easier to create good spending habits. All three card types could cap your spending at levels you can more easily cover. Secured cards even reward you for good spending habits, because using them could boost your credit score.

How Credit Card Alternatives Support Money Management

Exploring alternatives isn’t just about replacing credit cards—it’s about building healthier money habits.

For those in debt settlement programs, shifting to debit, prepaid cards, or mobile wallets could help you avoid new credit card balances while focusing on debt reduction.

Alternatives also break the cycle of revolving credit. When you use your own money—rather than borrowed funds—you gain a clearer picture of what you can afford. That builds lasting budgeting skills.

At Freedom Debt Relief, we’ve seen success stories from people who switched away from credit cards during their programs. Many found they spent less, saved more, and felt more in control of the future. By embracing alternatives, you’re not just sidestepping debt—you’re building a foundation for long-term stability.