Credit Cards after Bankruptcy

Apr 24, 2013

The decision to file for bankruptcy is never easy. There are so many different things to take into consideration and one of the most important issues to look into are the short and long term effects on a person`s credit. When the credit score goes down, opportunities disappear and the interest rates for lending tend to go up. However, this does not mean that a person cannot get another credit card. As soon as the settlement is complete, many start to get offers for new cards in the mail.

In the short term, there is no point keeping the old credit cards. They are no longer necessary, nothing new can be charged on them and they are in no way going to benefit the credit score. Instead, if a credit card is necessary, it is time to start applying again.

While applications may start showing up right away, make sure to read each one carefully. Some lenders believe that once bankruptcy has taken away all of a person`s debt, they are no longer a risk to lend to, especially in small increments. However, they do realize that there is always going to be some risk involved and in most cases, more so than traditional borrowers. The availability of credit will be there, but a consumer is going to pay dearly for it.

Be prepared to see increased interest rates that are well above what other consumers are being offered. Unfortunately, a person needs to start somewhere and those credit cards could be the key to building up the credit score again. Over time, things will improve, but there is no doubt that the pain of borrowing will be felt.

For those that don`t want to head down the traditional route for credit cards, it is possible to get a secured credit card or a pay in advance card. These can help a person get started with making improvements to their credit score. It takes time, but consistent payments and avoiding late fees or over the limit fees will help.

In the long term, it is possible to almost completely recover from a bankruptcy. Once the changes to the credit report are made and lenders begin to see that there are real improvements, it is possible to get improved credit offerings. Looking ahead, a person can get back to the way things were before bankruptcy; it just takes time and dedication. There are no laws that govern how and when a person is eligible for new credit. It is up to the lender to determine how much of a line of credit should be provided and what the interest rate should be.

Before going ahead with filing, it is important to get professional <a href=”“>bankruptcy advice</a>. There are several things that need to be looked at before making the final decision. There are both short and long term effects to filing for bankruptcy and it is important to make sure that this is the best possible option for a person`s credit and their future.

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