Credit Cards After Bankruptcy – Be able to Get One?
You have received your final discharge from the bankruptcy court and you now want to know whether you can get credit cards after bankruptcy. The simple answer is you will not be able to get credit cards after bankruptcy with liberal credit limits and interest rates. Chances are, you will need to wait a year or two after your discharge before you can begin to start getting major credit cards with favorable terms and conditions.
The main reason is that your credit score is going to be sharply reduced because of not only your having filed bankruptcy, but most importantly because of the negative credit items which caused you to file for protection in the first place. There is one type of credit card you can get right away and this might be your best alternative. Before discussing what is called a secured credit card, allow me to warn you against a certain type of credit card.
You have most likely heard or seen ads for a credit card with no credit check. Those cards are not worth applying for. The reason is they charge large fees, high interest rates, and usually start you off with a meager credit limit of $300.00 or less. Even those which claim that you will not have to pay any money upfront, will charge a number of fees to your new card and you will end up with an initial credit availability of $100.00 or less, despite the card having a credit limit of $300.00. And the fees are exorbitant. You should avoid theses cards at all costs.
However, secured credit cards are worth considering. A few well known national banks offer these. What they involve is your depositing the credit limit you want into a savings account and the bank issues you a credit card secured by your savings account. Whenever you want a credit line increase, just deposit funds into your savings account. This program not only helps you to save money, it enables you to establish credit as the account will be reported to the credit bureaus.
If you pay your bills on time and avoid going over your credit limit, then the bank will consider removing the secured requirement from your account usually after you have at least a one year history.