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 mounting 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 personal credit and credit scores using a specific type of credit card dispels such visions.

These credit cards can be great, providing consumers an exit out of debt and out of hell, particularly if they have been unable to get a bank account or a regular credit card. In current times, it has become necessary for there to be two incomes in any household. Because of this, both men and women must work, leaving barely and time to spare for preparing budgets, or planning for the financial future.

It is said that the way to run a marathon is one step at a time. Let’s take our first step by evaluating both pre-paid and secured credit cards and their pros and cons, particular to your situation.

Secured Credit Cards Advantages – Getting a secured credit card account is an easy and cheap way to begin boosting your credit. Damaged credit can also be improved with these types of cards. They can be used the same way in which you would use and Visa or Mastercard.

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 tough 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.

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.

Cons – If you are looking to rebuild or establish your credit however, beware. These cards may not report your repayment history to the credit bureaus. If the creditor does not report your account, this type of account will not help you improve your credit. By carefully selecting these cards, you can assure yourself that you receive the most bangs for your proverbial buck.

You should also take into consideration that pre-paid cards are not accepted in all circumstances. For instance, rental agencies for cars and hotels may not allow you to make payment using one of these or to secure the rental. To be safe, you should call in advance and verify the various payment methods that vendors like these accept.