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


ADVERTISING DISCLOSURE: is an independent, advertising-supported web site. 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. 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 Secured Credit Cards: January 2021 – Experts’ Choice

Top 5 Secured Credit Cards: January 2021 – Experts’ Choice

Posted: October 22, 2020

The COVID-19 pandemic has made significant changes not only in people’s lives and their financial standing but also in the entire financial sector of the U.S. We have collected the best secured card offers from our partners so that you can… Continue reading

Credit Card Tips For Holiday Shopping 2020

Credit Card Tips For Holiday Shopping 2020

Posted: October 15, 2020

November and December are the busiest months as gift shopping reaches its peak. People rush around looking for the best gifts and the best deals leaving a lot of money in the shops. Holiday season may force you to go over the household… Continue reading

Top 5 Soft Pull Credit Cards: January 2021 – Experts’ Choice

Top 5 Soft Pull Credit Cards: January 2021 – Experts’ Choice

Posted: June 3, 2020

When applying for a credit card, you definitely don’t want your credit score to go down. Here, you will find the best credit cards with a soft pull from our partners. An application for such cards won’t make changes to your credit history… 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!