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.
For some consumers, these types of credit cards may be the main solution, because they are very effective, and some consumers aren't able to get a traditional credit card, or even open a bank account. This day and age, most households have both parents working, so that there are two incomes supporting the family, which of course means there's slim to no time for creating budgets or researching solutions for maintaining a higher 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.
a.) Secured Credit Cards
Positives- Getting a secure credit card account is highly affordable and easy way to start you on the path to building your credit. Secured credit cards assist in improving and rebuilding bad credit. This type of card acts just like a regular credit card.
Negatives- The biggest setback for most people with the secure credit card, is that you have to deposit about $200-$275 in order to "secure" the account when you sign up. For most, this is a lot to ask. These cards also have a tendency to have additional fees (i.e. annual fees) and much higher interest rates (approximately 15% or greater). Even though these may seem like a lot, this card is probably the best choice for rebuilding credit.
2. Pre-Paid Credit Cards
Advantages- Pre-Paid Credit Cards are a very useful tool, because they give you all of the flexibility and freedom of using your own money. They look, feel, and spend just like a real credit card; they can be used in any occasion that you would use a regular credit card. With these cards, you determine how much money you would like in the account by "loading" money, instead of the company offering you a credit limit based on your financial history. Almost everyone can be approved for this type of card, and yes....even if you've had a bad credit past.
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.
Note that pre-paid credit cards may not be allowed in some situations. When you rent a car or book a hotel, some places will not allow use of a pre-paid card to hold car rentals or rooms. Be safe and call ahead of time to ask about the company's policy on pre-paid cards before you're halfway through the process.
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
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.
For some consumers, these types of credit cards may be the main solution, because they are very effective, and some consumers aren't able to get a traditional credit card, or even open a bank account. This day and age, most households have both parents working, so that there are two incomes supporting the family, which of course means there's slim to no time for creating budgets or researching solutions for maintaining a higher 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.
a.) Secured Credit Cards
Positives- Getting a secure credit card account is highly affordable and easy way to start you on the path to building your credit. Secured credit cards assist in improving and rebuilding bad credit. This type of card acts just like a regular credit card.
Negatives- The biggest setback for most people with the secure credit card, is that you have to deposit about $200-$275 in order to "secure" the account when you sign up. For most, this is a lot to ask. These cards also have a tendency to have additional fees (i.e. annual fees) and much higher interest rates (approximately 15% or greater). Even though these may seem like a lot, this card is probably the best choice for rebuilding credit.
2. Pre-Paid Credit Cards
Advantages- Pre-Paid Credit Cards are a very useful tool, because they give you all of the flexibility and freedom of using your own money. They look, feel, and spend just like a real credit card; they can be used in any occasion that you would use a regular credit card. With these cards, you determine how much money you would like in the account by "loading" money, instead of the company offering you a credit limit based on your financial history. Almost everyone can be approved for this type of card, and yes....even if you've had a bad credit past.
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.
Note that pre-paid credit cards may not be allowed in some situations. When you rent a car or book a hotel, some places will not allow use of a pre-paid card to hold car rentals or rooms. Be safe and call ahead of time to ask about the company's policy on pre-paid cards before you're halfway through the process.
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
About the Author:
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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