10 Alternative Options In Case You Can’t Get a Credit Card

Written By
G. Dautovic
July 11,2023

While having a credit card may come with various benefits for its holder, many people struggle to obtain the desired card for multiple reasons. Bad credit scores due to payment issues in the past and avoiding unfavorable interest rates are just some of the reasons why borrowers look for alternative financing methods.

There are various alternatives to credit cards, but not all of them may be suitable for your needs. So, read on to learn what options are available and how those could benefit you. 

What Are the Available Credit Card Substitutes?

If you’re wondering what alternatives to credit cards are out there, these are some of the most common ones:

Prepaid Debit Card

A prepaid debit card is a payment card whose owners add funds in advance and can use them until the balance is depleted. These cards offer several advantages over credit cards. 

First and foremost, prepaid debit cards often come with lower fees than credit cards, and no debt is associated with them since you can only spend the money already in your bank accounts. Moreover, no credit check is required to obtain a prepaid debit card, which makes it an ideal option for people with bad credit scores.

Increasing a Debit Card’s Credit Limit

Many debit and credit card issuers oblige their clients and increase the limit when asked. Note that these increases could be temporary (maybe a single day only) or permanent. 

Personal Loan

A personal loan is among the best credit card alternatives. This option primarily caters to people who are unable to obtain low interest rate loans.

Personal loans can be a great option if you need to borrow a large sum of money for a substantial expense such as home improvement. Interest rates on personal loans are usually lower than those on credit cards, and you'll have a fixed repayment schedule. Remember that the amount you can obtain depends on various factors.

If you’re considering this alternative, you might wish to learn how to apply for a personal loan. Also, think about checking out how to get a lower-interest loan as well.

Arranged Overdraft

Hopefully, you are in good standing with your bank, so you might be eligible for an arranged overdraft. This is another alternative to a credit card as an extension of your bank account. It's the money you can withdraw up to a specified limit once your balance becomes negative.

Remember that an overdraft can sometimes come with high interest rates, but some banks approve this type of loan interest-free within an agreed term or up to a certain amount.

Secured Credit Cards

A secured credit card may be a good option if you're having trouble getting a regular credit card because of bad credit. With a secured card, your credit limit is based on the collateral which a credit card issuer can use in case you default on the loan. Some collaterals a credit card company will typically accept are homes and cars.

So, it’s advisable to be punctual with your payments since credit card debt can cost you a lot otherwise. If you are unwilling to put up collateral, consider checking out how to get an unsecured credit card


PayPal is among the finest alternatives to credit cards since account owners enjoy similar benefits credit cards offer when purchasing online. Moreover, this platform provides robust protection against fraud and has a phone number for reporting the fraudulent practices users have detected. 

Plus, PayPal cards work pretty much like debit cards, and you can earn 1% cash back on all purchases.

Bank Account Connection

Your PayPal account can connect to your bank account and deduct the amount instantly. PayPal also offers a 'one-click' payment option, which makes checking out faster.

Short-Term Loan

Have you ever found yourself in a situation where you can't afford to pay your bills because of an unforeseen expense? If so, consider taking a short-term loan, another possible alternative to credit cards. 

This kind of loan can help cover a one-off expense, such as car repair. However, it's essential to be aware that taking out multiple short-term loans can quickly become unmanageable, as many of them come with high interest rates. 

So, while a short-term loan can be an excellent credit card replacement, make sure you can pay it off in full before applying for another one.

Electronic Wallets

Electronic wallets are intended for clients who have encountered difficulty getting their desired card. Ewallets can be used for retail transactions as well as sending and receiving money from friends and family. 

The best-known electronic wallets are Google Wallet and Apple Pay. They are practical since you don't need to carry any physical cards. But before using this particular credit card alternative, be sure to check what transaction fees apply.

Gift Cards

Gift cards are also convenient alternatives to credit cards in some cases.

Many retailers offer gift cards you can use at all of their branches, some of these even featuring a major credit card company's logo. Additionally, there are gift cards that can be preloaded with funds and act like debit cards.

Gift cards are popular among people who are reluctant to use their other cards for any reason. Many users resort to gift cards to avoid breaching their credit limits and thus maintain good credit history.

Guarantor Loans

If you have bad credit when applying for a credit card or a loan, you can opt for a guarantor loan, another good alternative to a credit card. 

A guarantor loan relies on the good credit rating of a family member or a friend who acts as your guarantor. It’s an excellent option if you haven't had time to build up a good credit score or have bad credit, irrespective of the reason.

With this type of loan, someone else will be responsible for repaying the loan on your behalf if it turns out you aren’t able do so. However, approach this option with caution and commit to it solely if you're sure you can pay off the loan in a timely manner. Otherwise, it could strain the relationship between you and your guarantor.

Peer-to-Peer Lending

Peer-to-peer lending also belongs to credit card alternatives. It comes down to taking a loan from an individual rather than a financial institution. Often more advantageous for the borrower, this type of arrangement may offer better rates than a bank.

On the flip side, the benefit for the lender is the possibility to earn more this way than placing their funds in a bank savings account. Regardless, there's a risk involved for the lender since the borrower might default on the loan, and getting the money back could prove tricky.

Pros and Cons of Credit Card Replacements

On the whole, there are various popular credit card alternatives you can resort to if you can't get a credit card under favorable conditions. But, they come with pros and cons, so let's see what the biggest ones are.


  • Credit card alternatives typically involve lower fees.
  • Secured credit cards allow you to build up your credit score and increase your credit limit if you pay on time.
  • The debit card is connected to your checking account, so you can't become indebted. Furthermore, debit cards typically don't have an annual fee.


  • Ewallets tend to have limited use depending on the wallet type you choose.
  • For a secured card, you must offer collateral, which could lead to losing your property if you don't pay on time.
  • Prepaid debit cards' main downside is that they aren't reported to credit reporting agencies, so they can't play any part in the FICO credit score improvement.

Role of Credit Bureaus

Credit bureaus have a key role when it comes to your applications for financial products. Specifically, these institutions perform a credit check on every individual and collect relevant information for banks and other finance companies regarding their payment history. 

There are three credit bureaus in the US: Experian, Equifax, and TransUnion. However, please note that they are not the ones who decide on whether you'll be approved for a loan. Instead, their credit report serves for providers to make informed decisions.

In Conclusion

There is a range of financial products from which you can choose an ideal alternative to a credit card. These include debit cards, secured credit cards, and personal loans. Each of these has its advantages and disadvantages, so it's essential to choose the one that’s right for you at the moment.

A secured credit card may be the best option to improve your credit score. However, a prepaid debit card is probably your best bet if you're looking for a way to make purchases without incurring debt. Finally, a personal loan may be the right choice if you need a substantial amount of money quickly.

But if you cannot find the right credit card substitute, perhaps checking out our guide about what credit score you need for credit card eligibility would be a good idea.


What are online alternatives to credit cards?


There are multiple online alternatives to credit cards, including ewallets, gift cards, and prepaid cards.

Can you really live without a credit card?


It's possible to live without a credit card, but it may be challenging. Credit cards can help build credit, make purchases, and provide financial flexibility.

What are three alternatives to making a payment without using a credit card?


Some common alternatives to making a payment without a credit card are prepaid debit cards, secured credit cards, and personal loans.

About author

I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.

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