In this day and age where most people have easy access to a consumer credit, Americans are finding themselves sinking deeper and deeper into debt. Racking up a mere $10,000 in debt is now easy and all too common.
As the pressures of mountainous consumer debt become an issue for more and more people, the demand for legitimate and proven ways to rebuild your credit history is on the rise. The word "budget" conjures up extreme images of depriving oneself of the foods one likes or more extreme visions of starving oneself pop up. However, a proven formula for debt management and the rebuilding of personal credit and credit scores using a specific type of credit card dispels such visions.
These cards are useful, and are sometimes the only solution for some people, because they may have been denied bank accounts or regular credit cards. Because most families these days have both husband and wife working, in order to have two incomes, that leaves very little time to setup any budgets or search for tips on how to get a better credit score.
Your journey to financial freedom starts with YOU taking the first step. Let us begin first, by evaluating the positives and negatives of both the secured and the pre-paid credit cards.
Secured Credit Cards
Advantages- Having a secured credit card is a very easy and cost effective way to build your credit. These secured credit cards can also rebuild and improve damaged credit reports. They work exactly like a traditional credit card.
Cons - One of the major drawbacks to this type of card is that to secure the card you must put down a $200 to $250 deposit with your application. For many this may be a tuff requirement. These cards also tend to have much higher interest rates (15% or higher) and additional charges such as an annual fee (usually around $50). Despite these drawbacks, for many looking to rebuild their credit, these cards make sense.
b.) Pre-Paid Credit Cards
Pros- Pre-Paid Credit Cards can be a great tool because they provide you with the freedom and flexibility of using your own cash. These cards look like real credit cards and can be used for just about any situation that requires a credit card. Instead of granting you a credit limit based on your financial standing, these accounts require you to "load" the card with your own money. Yeah, real cash. Approval for this type of card is easy and almost guaranteed, even if you have credit problems.
Disadvantages- Think of an alternative option to rebuild or establish credit. This type of account does not report your payment history or account standings to the credit bureaus. If the creditor in which you receive the pre-paid card from does not report your account, then it will NOT improve your credit. Be sure to research and compare which pre-paid cards have the best benefits according to your needs.
You might also consider that Pre-paid cards cannot be used in all situations. For example: hotels and car rental agencies may not allow you to use a pre-paid credit card to secure your rentals. It's always a good idea to call ahead first and ask each company their policy before entering into any transaction.
Identity Theft Prevention and Identity Theft Protection are a necessity these days. Put a stop to Identity Theft with LifeLock. Life Lock can make sure identity theft never happens to you. To learn more about how to protect yourself and your loved ones from identity thieves, visit lifelock.com
Author Resource:
Linda Seamore is an advocate for personal safety, dedicated to teaching people how to protect their identity. After much research, she found out about Life Lock , the leader in ID theft protection. Life Lock is a hands-on identity theft protection agency that specializes in the prevention of identity theft. Visit www.LifeLock.com and learn how to protect your credit.
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