When it comes to making a big purchase, having a credit card can make the process easier, especially if you don’t have the necessary funds when it comes time to pay. While pulling out a credit card and swiping it to pay for any and everything can often become second nature, there are ways to get through life without having one, while building credit at the same time.
According to creditcards.com, about seven in 10 Americans have at least one credit card. If you’re among the 30 percent who don’t, here are some ways to get through a variety of plausible scenarios you may find yourself in at some point down the road:
Renting a Car
Some car rental companies let customers use cash or even a debit card, so call ahead to check their policies. If you’re looking to rent a car without a credit card, you may be required to undergo a credit check. Also, keep in mind that some companies may place a hold on funds in your bank account, usually equal to the rental charges, as well as require a deposit of at least $200.
Pay stubs, utility bills in your name or other documentation may be required. At airport rentals, your trip itinerary may have to be shown if you don’t have a credit card.
Credit cards offer protection against thieves when shopping online. Debit cards, which are tied directly to your bank account, don’t. Therefore, crooks who get access to your card could drain your bank account quickly.
Instead of a debit card, use PayPal or another similar service where you can deposit money. Better yet, use a prepaid card that has a limited amount of money attached to it.
To reserve a hotel room, most hotels will place a hold of a few hundred dollars on a credit card. The hold goes away in a few days, and you’re unlikely to even notice it. A hold on a debit card, however, can tie up money in your checking account for a longer period of time.
For flights, you can either buy a ticket from a travel agent or at the airport ticket counter via cash, check, money order or automatic transfer from a bank account. That being said, airlines differ on the payment methods they accept, so check with the airline(s) you’re considering before making a purchase.
Airlines don’t apply a hold to payment methods for flight reservations, so using a debit card or prepaid card shouldn’t be a problem.