Tips on how to use your low-limit card to restore your post-bankruptcy credit

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Building Credit History » Tips on how to use your low-limit card to restore your post-bankruptcy credit

Tips on how to use your low-limit card to restore your post-bankruptcy credit


Updated: December 26, 2012

The content is accurate at the time of publication and is subject to change.

More and more people have filed for bankruptcy by the end of 2010, they have either filed Chapter 13 or Chapter 7 for bankruptcy protection, and this is the highest since the year 2005 and the reasons are plenty. The main reason being unemployment or underemployment, and most people are relying on these credit cards to meet their very basic requirements and expenses. In such a scenario, it does not come as a surprise that more and more people are filing for bankruptcy and are trying to make a fresh economic beginning. The trouble however begins only after the bankruptcy filing is completed. It is then that the negatives begin to surface and consumers are left with the daunting task of rebuilding their credit from scratch. Thankfully these customers have something to rely on. Low-limit cards are a benefit for these customers and it would help in giving their credit scores a boost.

There is a lot of damage done to the credit scores while filing for bankruptcy. While most of the debts may get wiped out at least 100 points gets wiped off from the consumer`s scores and it will continue to show up for the next 7 to 10 years on the credit report and this would depend on the type of bankruptcy that was filed. When the credit scores are not up to the mark consumers will have to struggle to avail personal, auto, or mortgage loans. And in case they do qualify for loans by default, they will be faced with interest rates that are sky high as these consumers are considered high risk. However, there are many credit cards that are now available with low limits and these are ideal for consumers to rebuild their credit scores that are weak.

The first thing to do while rebuilding the credit score is to pay up the monthly bills on time and without any delay. The second thing is not to rack up huge credit card bills again. This is a good way to show lenders that the consumers are responsible and careful with their spending habits and they have learnt their lessons well. This will help reestablish the faith in the customers as they have handled their credit in a responsible manner, used cash wherever possible etc. These low limit cards are mostly for these customers and come with high interest rates.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Top 5 Cards for Travel from Our Partners: Summer 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Summer 2018 – Expert’s Choice

Posted: February 12, 2018

The sun shines more and more each day, flowers are in bloom and you already feel how hot it is getting - summer is here. Summer holidays are almost here, and you are in need of dire preparation. You can lift in spirits and let CreditLand ... Continue reading
Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Posted: February 10, 2018

If you're trying to find the perfect rewards credit card, you might feel like you're drowning in options. There are just so many out there, and many of them look similar. This can make it tough to decide on a card. One thing people often ... Continue reading
Price Protection: Credit Cards That Will Refund a Price Drop

Price Protection: Credit Cards That Will Refund a Price Drop

Posted: February 8, 2018

Those who often find themselves buying stuff and then discovering that they could pay less for the same item they've just bought, will appreciate this credit card benefit – price protection. This is the least known and the most neglected ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!