Worried about securing a credit card after bankruptcy? Don’t be. Not only may you experience and improvement in your credit standing after a debt discharge, but you may be able to secure one or more lines of credit with minimal effort. In fact, there is a market for certain creditors that actually target post-bankruptcy consumers looking for credit card. While this may be good news, just know that not every card is the same and even ones that are “made just for you” should be considered carefully.
Picking The Right One
There are two common mistakes people make when securing credit after bankruptcy. First, people accept or use prepaid cards. When you use a prepaid card you are essentially using money that you have already set aside to use. These cards may help keep you out of debt or the slippery slope of overspending, but they won’t do a single thing to boost your credit. In fact, you should only be securing credit after bankruptcy for the purposes of repairing your credit not because you need the money.
Another mistake people make is obtaining the wrong type of credit card. Higher balance limit cards come with a steep cost, high interest rates. The best way to approach unsecured debts is by obtaining a smaller balance limit card with the lowest interest rate. This may mean that you are only eligible to receive a card with a $500 limit, but the point isn’t to rack up high balances rather it is to charge manageable amounts that you can realistically afford to pay each month. Remember the key to maximum credit repair is responsible spending and consistent payments.