How Do You Get A Credit Card After Bankruptcy?

Credit Card After Bankruptcy

Have you recently declared chapter 7 or chapter 13, and are now wondering if it is possible to get a credit card after bankruptcy?  You will be glad to know it is entirely possible.  Not only that, but you will be able to rebuild your credit by taking certain credit-conscious steps.  By taking these steps, you can rebuild your credit, which will reward you later on by allowing you to access lower interest rates and more lines of credit.

One of the first things most people do after they have gone bankrupt is look into how they get a credit card.  This is not because they immediately want to run out and start spending on the never never all over again, but because they want to start building up their credit rating and credit score.  Ironically one of the best ways of doing this is to borrow again.

Once you borrow and pay off your amount every month in a timely fashion, you will be saying to the financial world that you are now a safer bet, and  you will be building up a new credit history.

Credit Cards After Bankruptcy Discharge

Your credit score will be lowered by your bankruptcy, but you now have a chance to improve it.  Certain credit options won’t be open to you until your score improves, so you need to work with what you have.

So check around online first before you even start applying for your new card.  Read the terms and conditions for each card that you are looking into to make sure that they will issue a card to someone with a not so squeaky clean financial history. In fact there are lenders out there who will lend to people with bad credit so start with them first.  Do not be put off by the high interest rates charged because you will NOT be paying them as you will be paying off in FULL the amount owed every month so these charges will not affect you.

After you have done your initial research then you can apply, if you have done your homework well you should only need to apply to one as you should get accepted.  Remember it is not a good idea to apply to lots as this can be seen on your credit report, and you do not want lenders thinking you have loads of credit cards.

You might be offered a secured credit card shortly after your bankruptcy, and you should take this under three conditions:

1. Make sure the card reports to all three credit bureaus.  This is very important if you want to rebuild your credit.  Be aware that prepaid credit cards do not report to the bureaus, so they will not help you to increase your credit score.
2. Don’t go with a secured credit card that charges a lot of fees.  They could call them application, processing, or validation fees.  Whatever they are, avoid them.  By law, a secured credit card cannot charge you fees that equal more than 25% of the credit you are being offered.
3. Make sure the secured credit card will roll over into an unsecured one after 18 or 24 months.  This will give you lower interest rates and a better credit score rating.

Bankruptcy Credit Cards

Even if you don’t need a credit card after bankruptcy, you might want to apply for one just to begin re-establishing your credit.  People who travel usually need a credit card to rent automobiles and for other travel related expenses.  Whatever you do, make sure you only buy what you can afford.  That way you can pay the balance in full the following month.  This is key to proper money management.

You can also use small loans to help rebuild your credit after bankruptcy.  These are sometimes available from banks or credit unions, or even from payday loan services.  Your credit score will be higher if there is a mixture of credit transactions in your history.  A nice mix of credit cards and small loans will go a long way towards raising your credit score.

Best Credit Card After Bankruptcy

Only you can decide what the best credit card is for your circumstance.  If you want to avoid temptation, you can apply for a credit card that can only be used in a certain store.  Or you could get a gas station credit card that can only be used for fuel and oil purchases.  These credit cards will report on-time payments to the three credit bureaus so they will definitely help you to rebuild your credit.

Make sure you pay every bill on time after you declare bankruptcy.  Late payments will show up on your credit and combined with a prior bankruptcy will make it very difficult for you to get a credit card or loan in the future.  BE WARNED late payments will do you more harm than you can imagine and set you back.  Set up a bank order so that you pay off the full amount every month and on time.

It is entirely possible to get a credit card after bankruptcy if you follow these simple steps.