Credit Cards After Bankruptcy

You’ve probably had enough of credit cards after bankruptcy, but the truth is even after bankruptcy credit cards are essential to use so that you can build your credit back up to a respectable level. Credit cards may have gotten you into debt in the first place, but they don’t have to be used as purely a debt instrument. If you are just coming off a bankruptcy, you can still get a credit card no matter what other people may tell you. While it may be rather difficult to obtain a car loan, or mortgage right after a bankruptcy, a credit card is an entirely different animal, and most credit card issuers will not veer away from working with you as long as you are willing to accept the terms they lay out.

There are a whole host of credit cards available on the market. There are rewards cards, high limit cards, student cards, secured cards, and bad credit cards. Most companies and banks that issue credit cards use a tiered system that provides a different card that is designed for each type of credit applicant. People with excellent credit will get the cards with highest limits and best terms, people with average credit will get the cards with moderate credit limits and average terms, and the people with bad credit will get the cards with lowest limits and worst terms.

When you apply coming off a bankruptcy, you typically will have poor to very poor credit, along with the fact that you have the bankruptcy readily apparent on your credit history. Both of these factors are going to affect the kind of card you’re eligible for and prepare yourself to get rejected for even some of the worst cards that are available. All hope is not lost though, and in actuality, you still have a number of options when trying to find a card.

First you can try applying at the more popular banks if they make available a card for people with bad credit, or for people who are looking to build their credit. These types of cards will typically have very high interest rates, sometimes over twenty percent, as well as a variety of fees that may be required even on a monthly basis. The credit limits on these types of cards are usually pretty low, and do not expect to be able to increase it right off the bat if you are coming off a bankruptcy. The good news is that if you apply to at least four or five places, you should eventually get approved for at least one card, and this will be huge, as you can use this card to build your credit score back up over time.

Another way to go is to look exclusively for these bad credit cards by doing a search on Google or some other search engine. Look for companies that aren’t necessarily affiliated with the major banks, as these companies typically specialize in providing these sorts of cards to people with bad credit. Always be sure you do your homework on whatever company you’re working with before providing any personal information online, as there are a number of scams that target consumers that are looking for bad credit cards and loans.

Obtaining a secured credit card from a reputable bank is perhaps the best way to build your credit after a bankruptcy while still acquiring a credit card, and at the same time avoiding all of the so-called bad credit cards.. Most of the major banks have these kinds of cards available, and the only thing they require is that you be willing to put down in cash the amount equal to the credit line you are approved for. Your credit history and score will not play as heavy a role because the card itself is backed up by the collateral you provided as cash. Lenders therefore feel better about issuing secured credit cards because they know that they can always access the money the applicant put down in case they are ever unable to make their payments. By utilizing a secured credit card, you can avoid all the nonsense and exorbitant fees and rates that come with a “bad-credit” card, and at the same time rebuild your credit and overall score.

In the end, it is really about knowing your options and choosing an option that feels right to you. Everyone’s situation is different, and therefore no one answer is right for everybody. Make sure to perform thorough research, and if you are uncomfortable going ahead with something do not hesitate to consult a professional. Good luck in finding a credit card after bankruptcy that can hopefully repair your credit and get you back on the road to financial well-being.