Many consumers are in search of some helpful and legitimate strategies to help rebuild credit history, because of the continuous increase of consumer debt. Lots of people fear the “b” word (no, not that one)! The word “budget” usually sends a very negative image to most people’s minds; they think they have to pinch every penny and be forced to eat peanut butter and jelly sandwiches for the rest of their life. Thankfully, that’s all a myth! Making a great plan for controlling your debt and rebuilding your credit and credit scores, by using different types of credit cards can help eliminate your worries.

Not only are these credit cards beneficial, they also provide for some consumers the only way out, especially if they’ve been denied a bank account or traditional credit card. Given that it takes two incomes in most households and a great majority of men and women both are in the workforce these days, there is hardly any time to prepare budgets and investigate ways to increase their credit scores.

In order to get on the path to financial success, you must make your first step! Why don’t we take the first step and weigh both the secured and pre-paid credit cards, and the advantages and disadvantages of each.

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.

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.

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 crucial. Stop Identity Theft with LifeLock. Life Lock can guarantee identity theft never happens to you. To learn more about how to protect yourself from identity thieves, visit lifelock.com

Consumer advocate Linda Seamore is dedicated to educating people on how to protect their identity. After research on identity theft, she found out about Life Lock , the industry leader in ID theft protection. Life Lock is hands-on identity theft protection that specializes in prevention rather than after-the-fact protection. Visit www.LifeLock.com & learn how to take control.

1. Separate Needs from Wants. Financial security and independence relies heavily on being a smart spender. Don’t, for example, eat out when you can cook at home. Eating is a need but eating out is a want. Being thrifty is truly a necessity. Pay close attention to discounts for things you need, and clip coupons whenever possible.

2. Put away 6 months living expenses into a Savings Account. Estimate 6 months of living expenses by totaling your monthly bills, gas, and grocery expenses and multiplying by 6. Put this amount of money into a savings account. Start by simply putting a little away every month from your paycheck. This will be your rainy day fund and should only be touched in an emergency. If you absolutely must dip into it, make sure that it is for an emergency and that you replace it as soon as possible.

3. Begin paying off your debt. Start with the highest interest bearing loans, like personal loans and credit cards and begin paying them off. These you should take care of BEFORE you begin saving any money. The interest accrued on these loans can be staggering over time and will save you money in the long run if you pay them off first.

4. It has become increasingly more important to protect your identity. Identity theft is becoming the favorite crime among criminals. It is estimated that it costs victims of identity theft over 5 billion dollars a year to pay for identity theft. However, identity theft protection is now offered with services like Life Lock. Life lock guarantees the protection of your credit backed by a $1,000,0000 payment to you fit they don’t. They will help reduce the number of credit card offers you receive and will actively monitor you credit.

5. To discourage dipping into your savings needlessly, put your savings into CDs, money markets or other tax deferred accounts. If you dont have access to the money, you wont deplete it needlessly.

6. Get on a budget and stay on it no matter what. This is really simple to do. Label some jars or boxes with things like “savings” “eating out” or “entertainment”. Every payday, put $50 in each jar. That will be your allowance for that category until the next payday. When ever the money from one of the jars is used, you simply move to the next jar until you reach the next payday and can replenish. This sounds tough but it can pay off, literally.

The status of the current economy is awful, but that isn’t a secret. Therefore, we must look for ways to protect ourselves and our financial situation so that we don’t need the kind of financial assistance that some of the big companies have needed. Don’t let any of that nonsense happen to you this year. Keep a budget, look for deals, and spend smart!

If you are careful with your money, you will not require a bailout in 2009. Hey, maybe we can become the example and teach the major corporation CEOs how to do this.

Linda Seamore is an expert on the subject of personal finance and has written many articles on it and on credit protection programs like LifeLock. She suggests researching all credit protection programs like www.lifelock.com before signing up.