Credit card debt can hurt, but can be avoided with new no-bank debit cards

The major credit card companies have earned record profits in recent years, mostly from fees and higher interest rates charged when customers either pay late or go over their limits. Those record profits are sure to increase with the passage of new bankruptcy laws. The average household now has nearly $10,000 in credit card debt, and with recent increases in credit card minimum payments, many Americans have no idea how to get out of the vicious circle of debt that surrounds credit cards.

Of course, while it is difficult to get out of credit card debt, it’s just as difficult to avoid using credit cards at all. We live in an electronic society, and fewer and fewer people engage in cash transactions anymore. If you do business on the Internet, it’s essential that you have a credit card. What can be done?

One option is the debit card. In appearance, the debit card looks like a credit card, and may even have a Visa or Mastercard logo on it. As far as the merchant is concerned, it functions just like one, and you can either enter your personal identification number or sign your name and be on your way with your purchase. The difference between a debit card and a credit card is that the funds for the debit card come right out of your bank account. There is no bill, but you must have the cash in your bank account in order to make the purchase. Still, it’s a great system for those who have no credit cards or do not wish to use them.

What about people with no bank accounts?

To use a debit card, you must at least have a bank account from which the money can be deducted. Or you did before now. A new system, introduced by a Florida company called Morgan Beaumont, has introduced a debit card that uses no bank account. This is great for consumers who, for whatever reason, do not want to have or cannot have a bank account. The funds are added to the card at one of 73,000 locations where the card can be “charged up” with a cash payment through the company’s own SIRE network. The cards have an initial fee of $10-20, and a monthly fee of $5 or so.

While these cards do not yet have a Visa or Mastercard affiliation, company officials hope to arrange that soon. So far, 100,000 cards have been issued. For those who want the convenience of a debit card without the hassles of a bank account, Morgan Beaumont’s no-bank debit card may be the answer.

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