Credit Cards After Bankruptcy - Some Ideas
Go to: Previous Article Next Article
People who have felt the pain and humiliation of bankruptcy may direct some of their anger towards the credit card industry. However, they also have a need to rebuild their credit score and may be wondering about credit cards after bankruptcy.
The easy credit available through a credit card has been one of the main reasons for people getting into financial difficulty.
Even the minimum monthly payments can become too much as economic times change. Missing these payments can have a catastrophic effect on a credit score.
For this reason, many people decide not to have any credit cards after bankruptcy, seeing them as evil. But is that truly sensible?
The strange thing is that whilst you can destroy your financial record with credit cards, you can also restore it.
The way to restore your credit rating is not to avoid credit. It is, in fact, to show you can repay credit. By taking on a small amount of debt, maintaining the payments and paying it off is the best way to restore your credit score.
So, can you get a credit card after bankruptcy? The answer is yes, if you hunt around. You may be able to get an unsecured card, but the problem there is that you will be paying a much higher interest rate due to your credit history.
Backstreet credit card issuers may not register your card with the authorities. Not only would you then be paying massive interest rates, by not having the card registered no one can monitor your use of the card, and your credit score will not improve, defeating the whole object of the exercise.
For a virtually risk free approach, get a secured credit card. You give the provider a sum of money, say $400, and then you can use your card up to that amount. That way, you cannot run up debt you can't afford to repay, as you've effectively paid in advance.
You may wonder why bother to do this and not just use the $500 as cash?
Remember, this is about restoring your credit score - not about using a credit card. A secured card simply means that you're spending money through a card rather than just using cash. The point is, spending cash doesn't improve your credit rating, spending money via a credit card and repaying it, does.
If you choose to live using cash only, that's fine and you'll stay out of debt - but your rating will stay poor. A secured credit card gives you security and an improved credit rating.
Article Source: Articlelogy.com
- Credit Cards A big selection of Cards in all flavors: Bad Credit Cards, Secured Cards, Prepaid Cards, Canada Cards, Low Interest Cards -
Word Count: 446
Reduce Your Debts Without Bankruptcy. See How Much You Can Save. Free Debt Analysis
