How to Get a Credit Card Using Your Bank Account
A Credit Article Contributed by Kris Griebe
My Bank Account Can Help Me Get a Credit Card?
Yes, your bank account can allow you to secure a credit card, though not the same type of card you probably have in mind. Instead, you can receive a "check card" that is attached to your bank account and can be used like a credit card. Think of it as a secured credit card. In order to spend money with your check card, you have to have money in your bank account first. This method allows you to access most of the benefits of having a credit card, with very few of the drawbacks.
Ok, I Have a Bank Account, How Does This Credit Card, or Check Card, Business Work?
Well, here is how it works, in a generalized way. Your check card will be attached to your bank account, meaning that any time you use it, it will withdraw funds directly from your bank account (usually a checking account). The card will have a Visa or Mastercard logo on it, meaning that it can be used just like a credit card, anywhere in the world that accepts Visa and Mastercard, including the internet.
When you make a purchase, rather than it being charged to your credit limit, the money will come out of your bank account and be paid to the merchant that your made the purchase from. You can also use your check card just like an ATM card. If you use it at an ATM, you can withdraw cash from your account, and best of all you will not pay the added fees that are associated with cash advances from a credit card.
What are the Benefits of Having a Bank Check Card over a Credit Card?
The first benefit is probably the most significant. You will not have an interest rate! OK, OK, calm down, I know that is exciting, but read on, there is more. On top of your freedom from interest rates, you will not have to pay membership fees (which can sometimes be as much as $200.00 a year! ). You will also not have to worry about your credit card decreasing your credit score. It is not directly reported to a credit agency, and it is very difficult to go over your "limit" with a check card.
There are disadvantages though. A credit card has a credit limit, which means you can spend up to a certain amount, even if you do not have the money to cover the purchase right away. Check cards do not have that. If you wish to purchase something, you must have the required amount of money in your bank account first. So, you lose the option to pay off your purchase over time. Check cards are also unable to help your credit score, as they are not reported like a credit card.
As long as you are responsible with your finances, a check card can serve you just as well as a credit card, and even save you money in the process. Unless you intend to make high-priced purchases that you cannot pay for immediately on a consistent basis, a check card is probably the better solution for you!
