| Credit Cards After Bankruptcy |
| Written by Joseph Durrett | |
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Finding the best credit card deal after filing bankruptcy is going to take some research but it is not impossible. A consumer needs to take their time and look through what is being offered out there and weigh the odds and do some comparison-shopping. The first thing a person should know when applying for credit cards after bankruptcy is the difference between secured and unsecured credit cards. There is no doubt that you will get applications for secured credit cards soon after bankruptcy. What a secured credit card is a credit card, which is backed up by a savings loan. The amount you have in the savings account is the amount of the limit on the credit card. This is like insurance on the debt owed. A great example is if you have $100.00 in the account then this is the spending limit on the card. While the money is in the savings account in most cases it is earning interest. An unsecured credit card is a credit card with no savings account attached to it. Of course it will have a spending limit but will not be backed up by the money in the savings account. In order to obtain this type of card a consumer must fill out a credit card application and then the lender will get the credit report through the credit agency and decide if the applicant is approved and at what interest rate. If you bankruptcy is still fairly new and you have not yet begun to rebuild your credit you may be declined. When applying for a secured credit card be careful and be sure to do the research as all credit cards are not made equal. A consumer at this point may be getting secured credit card applications in the mail left and right as a lot of banks are pushing these. For those who are still searching for credit cards after bankruptcy there are some quick tips that will help. When searching for a credit card make a list of certain things or criteria that you will need to have met before applying for the card. One of the criteria may be the interest rate. When searching for the right credit cards after bankruptcy be sure to scout out those low interest rates. One card may have an interest rate of 9.9% while the next card has an interest rate of 23.95%. This is a major difference in rates and it does happen. Another thing to be aware of is the application fee. Many consumers without even realize it see the great interest fee and then get hit with a huge application fee. Some are as high as $125.00. Not realizing this and getting a bill for this much without spending a penny can send anyone reeling much less the consumer trying to rebuild credit. Once the card is accepted by the consumer it is much harder to cancel and the account and gets the fee to go away. Double-check those fees before accepting the credit card. When applying for credit cards after bankruptcy be sure the credit card reports to all three credit bureaus or agencies. The agencies are Equifax, TransUnion and Experian. If they do not report to the three companies then do not accept the card. You are trying to rebuild your credit and this is one of the most vital steps in the rebuilding process. It is also important to keep abreast of your credit score and what the credit card agency is reporting. An easy way to do this is by receiving all 3 in 1 credit reports. According to creditreport.com you can receive a free report and score. Another important factor is to remember not to apply for too many cards all at the same time. This will look as if you are not being financially responsible. And you really do not want to get too many cards all at the same time anyway. There is no need for it. And this in turn can hurt your credit score. Rebuilding your credit using credit cards after bankruptcy is really not hard to accomplish. It will take time and will not happen overnight. Many times it takes a few months to a year. Do your research and double-check the figures and choose wisely. When you do receive the credit card be very vigilant about the spending and make sure you have the money to pay the bill as soon as it comes in. We all know how easy it is to miss a bill and fall behind. Nobody wants to be on that never ending treadmill and have to start back at square one. |
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