Have you found yourself trying to rebuild your credit after bankruptcy? Have you thought you’ll never be able to get another credit card? You’re not alone; most everyone falsely believes that a bankruptcy means that for the next 7-10 years you’ll never experience the convenience of having a credit card. While I do not discount the seriousness of filing a bankruptcy, it is also not the end of the world.
Today, more and more credit card companies are offering those with bankruptcies and poor credit a way to get a credit card and begin to rebuild their credit. But, you need to be careful before filling out those credit card applications. Some of the terms and conditions with those cards are atrocious, and make rebuilding your credit after bankruptcy difficult at best. Here are some key areas to look out for with any credit car application.
There is no doubt that one of the drawbacks to having filed a bankruptcy will be higher fees in getting a credit card. It’s only normal, but the fees should not be excessive. You will undoubtedly come across credit card offers that have $150 account opening fees, $79 annual fees, a $6 monthly participation fee, $125 joining fees, $29 administration fees, and the list goes on. You can easily find yourself buried in fees and having a $250 – $300 balance on your account before ever even receiving your new card!
Next, look over the fees you could be charged if you make a late payment, or go over your credit limit. It’s important to understand what you’re facing in the event you get behind, although the best thing is to not let this happen to start with.
Annual Percentage Rates
This is another area to keep your eye on. I have seen interest rates as high as 43.9% before. Yes, you can expect to pay higher than normal interest rates, but they should not be more than 25%.
It you pay off your balance every month the interest rate will not matter.
Secured Credit Card Offers
This is your best way to go in getting a new credit card following a bankruptcy. I know that some will think I’m crazy for saying that, but consider the facts.
– The fees will be lower because there is less risk for the issuing card company with a secured deposit account.
– The interest rates will generally be lower due to the same reasons.
– You’ll be able to raise your limit and become eligible for increased credit lines without a future deposit quickly.
It’s also a winning proposition for the card company because they can apply your pre-paid deposit against your account balance in the event you fail to pay your statement.
You will most likely be mailed many different credit card offers following a bankruptcy. You can also go online and do a search for credit cards for people with bad credit, or a bankruptcy and find numerous offers. Many, if not most, will allow you to apply online. Again, keep an eye on the terms and fees and you’ll be fine.
Getting a credit card after a bankruptcy isn’t difficult; it’s finding the right one that will be the challenge.