Handling Credit Cards After Bankruptcy

Bankruptcy can provide great relief from unsecured debts such as credit cards. However, the help offered by bankruptcy should not be abused and is typically reserved for those experiencing financial hardships. After a bankruptcy, borrowers should proceed with caution when seeking to obtain a credit card or line of credit.

Becoming A Responsible Borrower

Some people end up in trouble soon after bankruptcy because they begin to seek out new lines of credit right away. While this may not be a bad strategy for most, some people do not take the time to plan for their future credit lines.

First, evaluate how much credit you truly need, not just want so you can buy that new living room set. It is a good idea to obtain at least one, small limit card after bankruptcy to begin accumulating a positive payment history. Make sure the credit limit does not exceed what you have the ability to pay off if needed. Keep a low balance each month and make timely payments. Following these steps will ensure you begin to rewrite your credit history in a positive light.

Second, shop around for the best credit offer. There are many companies that target post-bankruptcy consumers for lines of credit. Although these offers may come more easily than others, they most likely are full of unconventional terms and carry a high interest rate. Just because you completed a bankruptcy does not mean you need to take the first offer that comes along. Inquire about credit lines with multiple companies before deciding which credit line is best. Find a card that has the lowest interest rate possible, with fixed terms and payment conditions.