Tired of credit-card gotchas?

By Jen Haley, producer


NEW YORK (CNNMoney.com) -- Mired in debt from your plastic habit? Maybe you can't even qualify for a credit card. More and more folks are turning to alternative credit cards.

Credit union credit cards

In a recent op-ed two Harvard doctoral students talked about a study they conducted between investor-owned banks and customer-owned credit unions.

They found that credit cards from credit unions were less likely to charge fees and penalties that big banks do. And when fees are involved, those fees are less.

Credit union cards actually offer lower annual fees and longer grace periods than regular cards.

To join a credit union, you typically need to be a member of an organization. Ask your employer if there's a credit union you can sign up with. Perhaps your college alumni organization or community group belongs to a credit union.

To find a credit union near you, go to creditunion.coop. The Credit Union National Association can help you find a credit union by calling (800) 358-5710.

Prepaid credit cards

If you're having trouble qualifying for a credit card, you may consider opting for a prepaid credit card. Basically, you deposit money onto this card and use it until the money runs out. There are no bills and no interest charges.

There are some things to bear in mind. First, there are a number of fees associated with prepaid cards.

You'll pay a fee when you set the card, typically around $10, according to Ben Woolsey of Creditcards.com. You may also pay a monthly fee, transaction fees and fees when you reload your card with money.

In general, you won't be building your credit. And these prepaid cards aren't covered by the federal statutes that protect credit-card holders from fraud or limit their losses when cards are lost or stolen says Curtis Arnold of Cardratings.com. Some companies will offer some fraud protection however.

These cards may be a good option for younger people who are just getting introduced to the world of revolving credit. It's a safer alternative than secured credit cards.

Secured credit cards

This type of credit card is secured by a deposit held by the issuing bank. In general, you will have to deposit $500 to $1,000 to get one of these secured cards. But if you don't have good credit, or you're looking to improve your credit, secured credit cards can be helpful.

The downside is that you have a limited credit line and you do need that security deposit. But if you make payments regularly and on-time, this could help you graduate to an unsecured credit card.

Talkback: Are you considering using a credit union for some financial services? To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.01%4.03%
15 yr fixed3.12%2.97%
5/1 ARM3.11%2.99%
30 yr refi4.04%4.09%
15 yr refi3.15%3.05%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,804.80 26.65 0.15%
Nasdaq 4,765.38 16.98 0.36%
S&P 500 2,070.65 9.42 0.46%
Treasuries 2.18 -0.03 -1.27%
Data as of 10:35pm ET
Company Price Change % Change
Bank of America Corp... 17.62 0.09 0.51%
Apple Inc 111.78 -0.87 -0.77%
General Electric Co 25.62 0.48 1.91%
Intel Corp 36.37 -0.65 -1.76%
Microsoft Corp 47.66 0.14 0.29%
Data as of Dec 19

Sections

New York Magazine reporter Jessica Pressler, who has been caught up in controversy this past week, will not be moving on to a new job at Bloomberg News. More

Investors beware: These 5 global crises are likely to rattle the stock market and world economy. More

Forums in dark corners of the web sell the kinds of hacks that befell Sony. More

Unilever sued Hampton Creek over its egg-free mayonnaise spread Just Mayo. But the company behind Best Foods and Hellman's mayonnaise has now dropped the lawsuit. More

The income of the top 1% jumped significantly in 2012, far outpacing inflation. Not only did this group make a larger share of the country's income, their share of total taxes also jumped from 35% to 38%. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.