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.
They say a journey of a thousand miles starts with the first step. Let's take our first step and evaluate both secured and pre-paid credit cards and the pros and cons of each for your situation.
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.
2. Pre-Paid Credit Cards
Positives- The Pre-Paid credit cards come in great handy, because they allow you to be more free and flexible with YOUR money! This type of card looks exactly like a traditional credit card, and is used the same way. However, instead of the credit card company giving you a limit based on your financial position, these accounts have you "load" the card with your very own money (like a debit card). No worries, most people get approved for this type of card, despite any past credit problems.
Negatives-This may not be the best choice if you're looking to establish or rebuild your credit. Pre-Paid cards may not report your repayment history to the credit bureaus. If the company doesn't report back on your account, this type of card, unfortunately, will not improve your credit. If you look at all of your options available, and compare cards based on your needs, you'll be just fine.
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 Protection and Identity Theft Prevention are very important. Prevent Identity Theft with LifeLock. Life Lock can make certain that identity theft never happens to you. If you would like to learn more about how to protect yourself 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.
They say a journey of a thousand miles starts with the first step. Let's take our first step and evaluate both secured and pre-paid credit cards and the pros and cons of each for your situation.
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.
2. Pre-Paid Credit Cards
Positives- The Pre-Paid credit cards come in great handy, because they allow you to be more free and flexible with YOUR money! This type of card looks exactly like a traditional credit card, and is used the same way. However, instead of the credit card company giving you a limit based on your financial position, these accounts have you "load" the card with your very own money (like a debit card). No worries, most people get approved for this type of card, despite any past credit problems.
Negatives-This may not be the best choice if you're looking to establish or rebuild your credit. Pre-Paid cards may not report your repayment history to the credit bureaus. If the company doesn't report back on your account, this type of card, unfortunately, will not improve your credit. If you look at all of your options available, and compare cards based on your needs, you'll be just fine.
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 Protection and Identity Theft Prevention are very important. Prevent Identity Theft with LifeLock. Life Lock can make certain that identity theft never happens to you. If you would like to learn more about how to protect yourself from identity thieves, visit lifelock.com
About the Author:
Author Linda Seamore is dedicated to teaching people how to protect their identity. After reading the alarming number of identity theft victims, she discovered Life Lock . Life Lock is a hands-on identity theft protection agency that specializes in the prevention of identity theft. Visit www.LifeLock.com and discover how to protect you and your loved ones.
No comments:
Post a Comment