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It’s hard to imagine a world without credit cards. We love them for plenty of reasons, including the convenience, the grace period, and perks like cash back and travel points.

But using them to borrow money regularly is a different story. As unsecured, open-ended loans, credit cards charge high interest rates, and even the interest accrues interest. That makes them an expensive way to pay for things we can’t afford outright. Worse, carrying credit card debt can sabotage financial goals, like paying for college, buying a house, or saving for retirement.

This cost burden has even sparked a national debate. In January, President Trump called for temporarily capping credit card interest rates at 10% — a rate that is less than half of the current average. Bank trade groups immediately warned that such a limit would backfire on a massive scale: The new math would be disqualifying for most of the market, preventing at least 137 million Americans from using their cards, estimated the American Bankers Association.

Regardless of what happens in Washington (the president is now calling on Congress to enact a one-year cap), it’s important to know that plastic isn’t the only way to borrow money. Below we explore the pros and cons of a number of other options, including BNPL products, personal loans and home equity loans.

Buy-now-pay-later loans are a natural swap for borrowing money for small purchases, and most are designed to be interest-free. While products vary, often the purchase is split into four equal parts, with the first paid at checkout and the next three automatically paid at two-week intervals. You just need to be careful and organized, since late or bounced payment fees can counter any benefits.

Pros

•   No interest.

•   With no hard credit check, they can be easier to qualify for.

•   Quick approval, often right while you’re checking out.

Cons

•   Fees for missed payments can be as high as credit card interest charges.

•   Multiple loans, lenders, and rules can be hard to keep track of.

•   Easy approvals can make it easier to overextend yourself.

Personal loan

A personal loan can replace a credit card if you need to borrow a larger amount all at once, and the interest rates are lower and fixed. (Two-year personal loans average 11.7%, versus 22.3% for credit cards, the latest Federal Reserve data shows.) There’s also an endgame with personal loans, since you have a set repayment period, often two to seven years.

Pros

•   Interest rates can be half what credit cards charge, and the interest doesn’t accrue interest.

•   Monthly payments stay the same and there’s an end date.

•   No collateral needed.

Cons

•   Not an option for everyday shopping.

•   A lump sum requires advanced planning and you may be borrowing more than you immediately need.

•   Borrowers with less-than-stellar credit can expect higher rates.

Home equity

If you’re a homeowner looking to borrow a larger amount, another avenue is tapping into your home’s equity (aka the portion of your home owned by you, not the bank.) There are two main ways to borrow against your equity: a home equity line of credit (HELOC) and a home equity loan. Both typically have lower interest rates than credit cards and personal loans, but a home equity loan offers a lump sum and a HELOC functions more like a credit card. You typically need at least 15%-20% equity in your home, and there are closing costs, however. You also risk foreclosure if you can’t repay.

Home equity loan

A home equity loan can be useful if you’re looking to pay for a single large expense. And it doesn’t have to relate to your home. You might use the money to finance a roof replacement or a mother-in-law suite, but you can also borrow against your home to pay for a wedding, college tuition, or a car.

Pros

•   Fixed interest rates that are lower than most other loan types.

•   Payments don’t change from month to month.

•   You may be able to take a tax deduction on interest if used for home improvements.

Cons

•   Closing costs of 2% to 5% of the loan, and a longer application process.

•   You risk foreclosure if you can’t pay your loan back.

•   Not an option for everyday shopping.

HELOC

A HELOC has many of the same advantages that a home equity loan does, but it’s a revolving debt, so you can borrow money as you need it and like a credit card, you pay a variable interest rate. The flexibility can make it a good option for an ongoing project, like a significant home renovation or starting a business. The structure is different, however: Typically you have a draw down period where you can borrow up your credit limit followed by a repayment period.

Pros

•   Rates are typically lower than on a credit card or personal loan, and you can borrow money as you need, without reapplying for a loan.

•   Some HELOCs only require you to make interest payments during the drawdown period.

•   You may be able to take a tax deduction on interest if used for home improvements.

Cons

•   Closing costs of 2% to 5% of the loan, and a longer application process.

•   You risk foreclosure if you can’t pay the money back.

•   Less predictability: Minimum monthly payments may vary based on how much you borrow, the interest rate, and whether you’re in the repayment phase.

•   Some lenders charge annual fees or fees for inactivity or prepayment.

Note: A third way to tap into your home’s equity is to get a cash-out refinancing, but unlike home equity loans or HELOCs, this involves refinancing your primary mortgage at a new rate. Here’s more on how those work.

Borrowing responsibly

No matter which borrowing method you choose, the most important rule of thumb is always the same: Don’t borrow money you don’t have a solid plan for repaying. If you fall behind on your payments — or worse, default — you can hurt your credit score and derail your financial future. Here are other important factors to keep in mind:

•   Fees: Interest rates are just one part of the equation when you borrow money. Make sure to factor in loan origination fees, late fees, or closing costs before deciding which type of borrowing is most worthwhile for you.

•   Consumer protections: Credit cards come with legal protections that don’t necessarily apply to other loans like BNPL. Last year, the Consumer Financial Protection Bureau reversed course on BNPL, saying it wouldn’t prioritize enforcement of a new rule giving consumers the right to dispute BNPL charges and demand refunds.

•   Debt consolidation: Credit card alternatives can be good options for consolidating existing debts too. If you’re struggling under the weight of high-interest credit card balances, you may want to explore consolidating that debt at a potentially lower interest rate.

•   Impact on credit score: Different borrowing methods can have a different effect on your credit score. For instance, if you’ve only ever had credit cards, adding a personal loan or home equity loan could benefit your score, given lenders like to see a mix of credit types.

•   When you’re not borrowing: If you’re paying your balance in full each month, credit cards can earn you lucrative rewards on spending. But other digital payment options include debit cards and ACH transfers, which work well for things like automatic bill payments. For splitting the check at dinner or paying the Parent Teacher Organization, you can also use peer-to-peer payment apps like Venmo or Cash App. Of course, you probably won’t earn cash back or points on those latter options, but you can still tap into any standalone loyalty or frequent flyer programs.

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