Credit card alternatives

By   |   Verified by David Boyd   |   Updated 19 Sep 2023

Although credit cards are very popular, and are the preferred payment method for online shopping in particular, they are not the only way to pay.

Whether you are unable to get a credit card or just want to avoid debt, here are the best alternative ways to pay (including some you may not have heard of).

The modern way to layby

Buy now pay later

Popularised by Afterpay and Zip Pay in Australia, buy now pay later services offer payment by instalments — typically over 4 or 6 fortnightly payments — and usually with no interest charges. Fees can be high if you miss payments.

BNPL has the advantage of being interest-free (much like a responsibly-used credit card) but it can be more difficult to keep track of purchases, easier to overspend and get into debt, and more expensive in the long run if you incur account fees or late fees.

Another downside to be aware of is that some BNPL services do not report to credit bureaus, which can impede the development of your credit score. If you want to read more on this, we have a whole article where we compare Afterpay to credit cards.

Tried and tested


Cash is accepted in practically any store. It's can't be used for online shopping though, and it can be a security risk to carry around. But is there anything quite like a stack of fresh notes?

Buy now pay later for adults

Charge card

Similar to a credit card, but without the option to carry over a balance at the end of the month and pay interest on it. American Express are the main issuer of charge cards in Australia.

Charge cards have experienced a surge in popularity since they combine rewards and limited credit.

For the HODLers

Crypto card

A crypto card is typically linked with a crypto exchange. They let you spend your crypto assets, which may not be a great idea considering the potential returns.

Several of these reward spend with crypto, often with much more attractive earn rates than a typical rewards or cashback card.

Only spend what you have

Debit card

A debit card looks like a credit card, but it is linked to your transaction account. It can used for purchases online and in-store. Unless your bank has provided you with an overdraft, there is no scope for building debt with a debit card.

Debt card drawbacks include missing out on interest-free short-term credit and the free rewards and benefits associated with some credit cards.

Funding for big purchases

Personal loan

A good option for major purchases (furniture, appliances, technology, holiday) if you need time to pay, because the interest rate for a personal loan is usually lower than that of a credit card. Repayments can be spread out over 1 - 7 years.

Many lenders now offer personalised interest rates based on your credit score. Personal loans, particularly secured loans from non-bank lenders, are more available to people with bad credit than credit cards are.

However, the disadvantages of a personal loan are that it may require security (i.e. collateral), the entire loan amount has to be drawn down at the beginning of the loan period, and it usually has to be repaid in equal instalments over a fixed term with little flexibility.

The consciencious option

Prepaid card

Prepaid cards can be used like a debit card, but are preloaded with a fixed amount of cash rather than being linked to a bank account or line of credit.

Most travel cards are prepaid, but some people like to use them more widely since you cannot overspend with them.