Applying for credit cards after bankruptcy is a common step people take to restore their finances.
Although there are a few details to consider, credit cards for people with bankruptcies are not impossible.
Once issuers see what they need to see, you can have the comfortable and secure life of owning a credit card again.
To make this happen, here is what you need to know.
Credit Cards After Bankruptcy: Dream or Reality?
Reunited with Your Credit Card
Bankruptcy is no trivial matter.
It can disrupt your entire world and mean a different lifestyle pace.
However, as countless people have proven, it is possible to get back on track with one’s finances.
One of the ways by which people pick themselves up is by getting credit cards after bankruptcy.
Of course, you must do this after you have completed other outstanding payments that led to your bankruptcy.
With a clean slate, yes, you can get approved for credit cards after bankruptcy.
Secured Credit Cards
Now that you have been discharged from bankruptcy, it is time to look for credit cards for your unique situation.
After declaring bankruptcy, your credit score is extremely low and your credit report will reflect this for up to ten years.
Thus, it will be difficult to convince issuers that you can handle a new credit.
But you can—with the right options!
Secured credit cards are usually the way to go.
People who are recovering from bankruptcy need to use new credit in a way that does not lead to a repetition of financial hardship.
A secured credit card requires borrowers to deposit a certain amount.
This amount is determined by the credit card limit.
If, say, you applied for a secured credit card with a credit limit of $300, you need to also deposit $300.
This ensures that you purchase only what you can afford.
Also, remember that there is an interest rate, and you should be prepared for this.
Staying within your means is key to never having to declare bankruptcy again.
Taking the Next Step
Now that you have your new credit card, it is time to rebuild your credit.
A good practical tip is using your credit card strategically.
What does this mean?
Use your new credit card for cheap transactions that you are sure you can afford.
Basically, you are substituting the money you have with in your checking, with your credit card.
This seems like a pointless process, but it is quite effective.
By charging only affordable transactions, you can repay your credit card bill in full every month consistently.
This will show in your credit report. It will begin to look like you are rebuilding your financial life by being a responsible consumer.
Sooner or later, you will be able to regain the perks and privileges that high credit score holders enjoy.
Watch this video from the Bank of America for more tips on taking care of your credit score:
Getting approved for credit cards after bankruptcy is always possible.
There are options and strategies to help you obtain a new credit card.
More importantly, these options and strategies prevent you from spiraling down into bankruptcy again.
With this experience, the future can only be kind.
You will soon be a prudent consumer and your bankruptcy will simply be a thing of the past.
Do you have any other advice for rebuilding one’s finances after bankruptcy? Let us know in the comments section below.
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