Credit Cards After Filing Bankruptcy
It makes sense to me that clients ask questions about obtaining credit cards after filing bankruptcy. After all, a credit card is a great resource for emergency situations, and the reality of life is we don’t always have money on hand that we need for purchases today. And yes, obtaining credit cards after filing bankruptcy is an option.
Credit Card Offers After Bankruptcy
Immediately after filing bankruptcy, you’ll start to receive offers for unsecured credit cards. This comes as a surprise to most clients, but keep in mind that after you filing bankruptcy you have very little debt. You actually look like an attractive candidate from a bank’s perspective. The bank also knows you can’t file bankruptcy again for another eight years, typically, so they feel confident you’ll pay back any debt you incur with a new card.
The downside to the offers you’ll receive on credit cards after filing bankruptcy is high percentage rates and high annual fees. This will lessen as you re-build your credit score in the months and years after filing bankruptcy.
Secured Credit Cards
One option for getting back in the credit game early and re-building your credit score, is a secured credit card. Credit unions offer these options and I recommend them for clients on the heels of filing bankruptcy. The arrangement is you give the credit union an amount of money (say $500), and they give you a secured credit card where you can charge a balance of up to $500.00. While you are technically using your own money, the upside is that each month you make a payment the credit union will report positively to the credit bureaus and your credit score will rise much faster than if you are just waiting for time to pass after filing bankruptcy. With several on time payments, the credit union typically will increase the limit on your secured card without requiring more money from you.
Your Credit Score And Bankruptcy
Typically, if you’re considering filing bankruptcy, your credit score has already taken a few dings. The filing of the bankruptcy will be the final ding on your credit but most clients find their credit score one year after filing bankruptcy is as good as or better than it was after filing. And the freedom from the pre-bankruptcy debt is priceless.
Call An Attorney
If you would like to speak with an attorney about credit cards after filing bankruptcy, or any other topics surrounding bankruptcy options, please call us at 704.749.7747. We’re here to help and we hope you choose to recover with us.