Credit Cards After Bankruptcy

Credit cards after bankruptcy will be different than before, but that doesn't mean you shouldn't use them.

You won't be able to find an unsecured card right away, but that's ok. With a focused plan you can set the goal to be in good financial standing in two years, and this is an important part of a plan. The thing you have to do in these two years is show that you can be trusted to make payments and not get into debt problems again. Your history makes you a risk for companies, so you need to build two news years of positive history. Because you are obviously not the only person in this situation, there are products made specifically with this in mind. Banks and other financial institutions have secured cards. You deposit some money, typically a few hundred dollars, into a savings account which secures things for the bank. You use it just as you would an unsecured one, but with a much lower limit. This makes you less of a risk for the company.

When you go to look at credit cards after bankruptcy there are a few things to keep in mind. First of all, you want to make sure there are no application fees and the annual fees seem reasonable so do compare between companies. You need to ask to make sure that the company does report to the three major credit bureaus; Experian, Equifax, and TransUnion. If they don't do this you are wasting your efforts, so go elsewhere. The last item of importance is to make sure that after 12-18 months of timely payments you have the option to switch to an unsecured deal. On your end, you need to make sure you use it lightly, and pay your balance monthly. This can be a hard pattern to get into if you've never done it before, but it will do good things for your credit.

Things are undeniably different for you now, but you don't need to hide away from your finances. Take control and have a plan for credit cards after bankruptcy.