For hundreds of thousands of Americans every year, their financial obligations overwhelm their monthly budget and they are forced to file bankruptcy. Many years ago, filing bankruptcy was something that followed the consumer for years and prevented getting any credit or loans for years. But these days, you can go bankrupt and re-establish your credit within one year using the many credit card options that are available.
Credit Advice For Bankrupt Consumers
In most cases, it was credit card debt that played a major role in your bankruptcy. The first thing you need to understand that credit cards, when used responsibly, are not bad things. You can rebuild your credit by getting one credit card and showing that you can manage your spending. For example, avoid maximizing your available credit limit and make sure that you make your payments are made on time with your post-bankruptcy credit card to quickly re-establish your credit score.
Post-Bankruptcy Credit Card Offers
After your bankruptcy discharges, you will start to receive credit card offers from companies looking to help you fix your credit. Most people who just went through bankruptcy are caught off-guard by these offers, but they are real. The key is to read them thoroughly to make sure that you understand all of the conditions each company is offering.
In most cases, these cards will carry very high interest rates which will cause you to start building debt again. It is usually best to use cash only for a few months and wait until you can get better offers.
The Waiting Game
The best approach to getting a credit card after bankruptcy is to pay all of the bills you have on time and wait one year. You would be surprised at how high your credit score has gone in that year, and that is something you can use to your advantage.
Since your bankruptcy will still be listed on your credit report, you will want to research credit cards that are intended for people with bad credit. There are websites that will show you where your credit score needs to be to qualify for these cards. Search through the cards and find the one that has the features you like and is available to people with your credit score. Do not apply to multiple cards at once. You should only apply to one card at a time until you are approved. You only want one card, which is why you should not apply for multiple cards at the same time.
Secured Credit Cards
If you are having problems being approved for an unsecured credit card, then your best bet is to get a secured credit card. There are many reputable banks that offer secured credit cards and you want to make sure that the bank that issues your card reports your credit activity to the reporting agencies. A secured credit card is tied to your bank account and only allows you to spend what you have in your account.
Bankruptcy is not the fearful process it used to be and recovering from bankruptcy is not as difficult as it used to be. If you pay your bills on time after your bankruptcy discharges, then you should be able to get your own credit card within a year.
Jim Treebold is a North Carolina based writer. He lives by the mantra of “Learn 1 new thing each day”! Jim loves to write, read, pedal around on his electric bike and dream of big things. Drop him a line if you like his writing, he loves hearing from his readers!