Convenient Alternatives to Credit Cards

Living without credit cards can be easier than you’d think. There are at least half a dozen alternatives to credit cards for everyday purchases, regardless of your credit score.

Sure, there are times to avoid credit. When you’re focused on paying down debt, you might avoid using credit cards and taking on new debt while you chip away at your balances. 

But as society moves further away from cash and people purchase more online, credit cards seem to have become indispensable. Especially since they come with security guarantees like fraud protection, and often reward you for spending. Finding solid alternatives can be tricky.

If you’re not using cash or credit cards, how can you make purchases? You need to pay somehow—and that’s where credit card alternatives come in.

What are Credit Card Alternatives?

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

You can easily shop online without a credit card. Here are a few popular alternatives.

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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. Debit cards are less flexible than credit cards, since the money must be there already. To avoid overdrafting and causing a negative bank account balance, keep close track of your spending. A budget can help.

Consider opening a second checking account for all your debit card use. You can be more confident that you won’t accidentally spend money you need for essentials like rent and utilities. This strategy could help you establish a better understanding of your budget, and become more disciplined with it. 

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

Open checking accounts with low or no monthly fees to keep your debit card use inexpensive.

Reloadable prepaid cards

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

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.

You may have to pay transaction fees when you swipe at ATMs, as well as 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’ll pay $2.50 per transaction (along with any applicable ATM operator fees) to use it at other ATMs. 

Research helps 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. 

Reloadable prepaid card pros and cons:

• You can only spend with a preloaded card

• Zero debt risk when swiping

• Much less flexible than credit card

• Not reported to the credit bureaus

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

Buy Now, Pay Later (BNPL) services

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

BNPL services are good 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 about four bills, 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 incur heavy interest charges and fees

Secured credit cards

A secured credit card is a credit card that requires a security deposit as collateral. Collateral is something of value that the lender can keep if you fail to repay the debt. It’s not prepayment for your transactions. 

The credit limit is often equal to the amount of your deposit. If you want a higher credit limit, you can make a bigger deposit. You use the card just like any other credit card. You’ll get a monthly statement. If you have a balance, you can choose to make just the minimum payment, or you could pay more. If you don’t pay off the card each month, you’ll 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:

• Can spend as flexibly with a secured card as with an unsecured card

• Potential to help you build credit

• Must put down initial deposit to spend

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

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

Apple and Google both offer mobile apps to make purchases using a digital wallet and a linked debit card, prepaid card, or checking account. These digital wallet alternatives to credit cards store your account details so you don’t have to type them in each time you make a purchase. 

Google Pay, Apple Pay, and PayPal can link directly to your bank account. They also support Buy Now, Pay Later loans.

Mobile payment options pros and cons:

• Choose your payment option at checkout

• Prefilled payment details

• 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 the 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 bad 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 big 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 can be used as alternatives to credit cards. These digital assets can be traded back and forth just 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 might have to fend for yourself.

Cryptocurrency pros and cons:

• Easy to open a wallet and get started

• Lots of scams and little protection

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 must track.

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 cap your spending at levels you can probably cover. Secured cards even reward you for good spending habits because using them can boost your credit score.