Credit After Bankruptcy: Why Choose a Secured Credit Card Offer
Virtually everyone I meet with to discuss the filing bankruptcy is worried about future credit. Is it possible to reestablish credit after filing bankruptcy? It is. It might take a year or two after bankruptcy to rebuild your credit score, but imagine how long it will take if you continue to struggle with your existing debt. One good way to start rebuilding your credit score after bankruptcy is by getting a secured credit card.
Unsecured or Secured Credit Cards after Bankruptcy?
When looking for a credit card after bankruptcy, you will receive piles of credit card offers from different companies. Choosing the right card can be a daunting task. Should you apply for a secured credit card or an unsecured credit card? Secured credit cards are often better deals than unsecured cards because the fees and interest right are usually lower that the unsecured cards you can qualify for immediately after a bankruptcy.
What is a Secured Credit Card?
A secured credit card requires a cash deposit as collateral for the credit line. Your credit limit is either the amount of your deposit or some percentage above that amount. Secured credit cards are designed for people with a poor credit score, such as bankruptcy. They may charge higher fees, but in many circumstances, they will less expensive.
Top Tips for Finding a Secured Credit Card after Bankruptcy
1. Check the fees involved with the credit card offer, because regular payments such as annual fees or processing fees may have to be made. Remember, annual fees differ significantly between various banks.
2. Apply for a secured credit card that doesn’t charge an application fee.
3. Because the card is secured by a deposit, you should not have to pay a high interest for a secured credit card you get after bankruptcy.
4. Make sure that the credit card company reports your payment history to the three credit bureaus. If they don’t, it will not help rebuild your credit.
5. The company should not report that you are holding a secured card to the bureaus, which can adversely affect your credit score.
6. Watch out for companies that use deceptive practices. Research the company and make sure that it does not have a history of consumer complaints.
Bouncing back from a bankruptcy does not have to be hard. My firm offers our clients free enrollment in a 14 Week Program that will teach you how to rebuild your credit the right way and how to re-establish your credit after a bankruptcy.Google+