Credit Card After Bankruptcy
As you might expect, getting a credit card after bankruptcy will be a bit more difficult than it would be otherwise. Many credit card issuers, having seen how you erased your previous credit card debts via bankruptcy, will be hesitant to give you another card.
Why Companies Actually WANT To Give You A Credit Card After Bankruptcy
On the flip side, however, realizing that you can't re-file bankruptcy for a certain number of years, some credit card companies will take the contrarian view and will gladly offer you credit - although, with greater strings attached and with greater penalties.
After filing for bankruptcy, many people are surprised to find that they are still getting credit card offerings in the mail. Reading the fine print, however, they will discover that the interest rates being offered them are much higher than normal. In addition, they may have to pay annual fees on the card, and they have to deposit a certain amount of money with the company.
Getting a credit card after bankruptcy is a lot easier than people think. The easiest way to obtain one is to apply for a secured credit card. The odds of being turned down for a secured credit card are almost nil. The challenge, however, is to find a company offering the card on terms that you can live with.
Fewer companies are offering secured credit cards than in the past which means that there is less competition for the remaining companies. The result, to you, is that their terms are much less favorable than in the past. Ideally, if you belong to a credit union that offers secured credit cards, this would be your best bet. Otherwise, you will have to shop for the best deal possible.
The danger in getting a credit card after bankruptcy is that you will get into credit card trouble again. The difference, however, is that this time, since you can't file bankruptcy right away, the credit card companies will have more resources to come after you. They will be able to garnish your paycheck and wages without the fear that you will be able to escape your debts by filing for bankruptcy again. In other words, if you aren't able to adequately handle your credit card expenditures, you can easily find yourself in even worse financial problems than before - and this time with no out.
Applying for a credit card after bankruptcy can obviously be embarrassing. There is undeniably, a stigma in filing for bankruptcy. Regardless of the stigma, however, you can't stop living your life simply because you're embarrassed. Your goal after bankruptcy should be to get your financial life stabilized as soon as possible. And part of this process is to begin to build up your credit again, which in our culture, means applying for a credit card. Businesses do this all the time. They get into financial trouble, file for bankruptcy, and continue on. And so should you.
Secured Credit Cards After Bankruptcy
After a bankruptcy, you will want to start to rebuild your credit as soon as possible. One of the best ways to do this is by applying for one or more secured credit cards. These cards are usually designed for people in your exact circumstances, i.e., with bad credit. With a secured credit card, you will have the amount of credit available equal to the amount you have deposited with the credit card company's bank.
Credit Report After Bankruptcy
If you start to build up your credit as soon as possible after a bankruptcy, your credit report will begin to reflect that fact right away. Even though the record of your bankruptcy will stay on your credit report for as long as ten years or so, it doesn't prevent you from immediately taking steps to improve your credit score. You can do this by simply taking small secure loans and paying them back on time.
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