Believe it or not, getting a credit card after bankruptcy is one of the best ways to rebuild your credit. The trick is to make sure you choose the right card and use the right method to start rebuilding your credit score.
The main reason to get a credit card after bankruptcy is to establish a good credit history. You can improve your score significantly by making on-time payments and not carrying a large balance. Some people report difficulty in getting an unsecured credit card after bankruptcy, while others are surprised by the flood of offers they receive. Just be cautious when signing up, because interest rates and fees can be enormous.
One great way to start over is with a secured credit card. To get this type of credit card, you place a security deposit with the lender. In return, you get the use of a major credit card just like any other. Your charging limit can either be equal to the amount of your deposit, or it can be a percentage of your deposit, depending on the lender. These are low-risk cards that prevent you from spending more than you can afford, but many charge high application and processing fees.
A standard unsecured credit card may be the answer, but again, interest fees can quickly balloon. Some lenders will also try to gouge you with annual fees or won’t report your payment history each month to the credit agencies. These cards should be avoided.
It’s best to carefully consider any offer of credit now that you will be rebuilding your credit score. By not spending more than you can afford, and always paying on time, you will be on the path to a 720 in no time!
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