How do you get credit cards after bankruptcy?


Quick Answer

To get a credit card after bankruptcy, it is important to shop around and compare offers, because many companies charge high interest rates and fees to those with poor credit ratings. Secured credit cards, which require security deposits in bank accounts, allow cardholders to improve their credit ratings before moving on to riskier unsecured cards.

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Full Answer

After filing for bankruptcy, people often get a number of offers for unsecured credit cards. Sometimes these cards initially have a low interest rate, but it quickly escalates. Additionally, there are usually high monthly or yearly fees. If cardholders fall behind in payments, they can easily go back into debt. The deposits and spending limits for secured credit cards help cardholders build credit without the risk of debt, although some institutions also charge fairly high fees for secured credit cards.

After bankruptcy, research should be done before taking action. Submitting applications for several credit cards at once is discouraged, as applying for credit too often can further damage a credit score. Once a credit card is acquired, it should be used infrequently, and the balance should be kept well below the maximum allowed. It is imperative to make monthly payments on time, and if possible, pay off the full balance each month. Although bankruptcy usually remains on a credit report for 10 years, wise credit-card use strengthens a credit score much sooner.

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