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[Thursday, August 02, 2007]
Credit cards after bankruptcy – to apply or not?
So you had bad luck repaying your debt and you recently had to file bankruptcy. A lot of people tend to think that their credit history is ruined and there are no more chances to seek for financial aid. However, there are still certain card issuers that are willing to help you obtain credit. Whether it's a business trip or an everyday purchase, there are cards on the market that can satisfy your needs. But be prepared, the deals you might see may not exactly meet your expectations. Getting any significant help at this stage is a difficult task. Card issuers realize that you might be a risky client and an open credit line may result in unforeseen debts. Nevertheless, financial institutions are able to employ certain financial strategies to take control of the process. A wrong thing to do here is to stay completely away from the credit industry. There are actions that need to be taken to recover your status. Simply keeping yourself out of this business will only temporarily solve the problem. A smart approach to credit cards might shorten the time it will take you to get back on track. Even though you will not be able to obtain the same credit cards until your history is recovered, saving up some money may easily get you a secured one. Secured credit cards have a deposit equal to the desired credit limit. Comparing different offers while saving up some money will easily get you a card in few months. When it comes to unsecured cards, things get tougher. You will no longer be eligible for credit card applications with low APRs, low balance transfer rates and high credit line. Trying to apply for such cards will most likely damage your credit score every time your application is rejected. Be reasonable; don't let yourself be pushed into the chase for rates, fees, bonuses and rewards. Store credit cards are also willing to "give you another chance". Their credit line might be bigger, but the APR on such cards is very high. Furthermore, such cards can only be used in particular stores, making it useless if you are planning to take this card on a business trip. Either way, experts agree on one thing. Applying for a credit card in 2 or more years after filing bankruptcy increases the chances of your application to be accepted. Financial institution and lenders aren't really happy to see bankruptcy declaration as an item in your recent credit history report. Your job here is to cover it up with on-time payments. A wise thing to do on this stage would be to apply for a credit card with moderate rates. Make sure not to stay near your balance limit for a long time, try to make payments in advance, do not try to apply for more than 2 cards and your score will be constantly increasing. Of course, you may get a credit card much sooner, but don't expect anything good out of it. Financial institutions that will be willing to offer a good card at this time have something deceitful on their mind. Many banks seek for people who have declared bankruptcy not long ago to offer them unilateral deals. Card issuers are aware of their situation and they make use of it. They are trying to push their deals, marketing them as the last and only chance for someone to recover his credit history. This delusive practice has forced many customers to apply for cards that have only made it harder to recover their financial life. To sum it up, proper use of any card will cure your credit score in one way or another. If your bankruptcy has something to do with credit cards, understand what went wrong and avoid making the same mistakes. Make sure not to rush yourself into unfavorable deals with high rates, sky-high application fees, etc. Bad credit due to bankruptcy isn't a dead end. Copyright © 2005-2009 Credit-Land.com, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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