CREDIT CARDS AFTER BANKRUPTCY
At the conclusion of bankruptcy, your credit options are going to be scarce. The effects of having bad credit can last for years. It is important though that you look to re-establish your credit and soon as possible since longevity of accounts is an important factor in credit score calculations. One of the best means for rebuilding credit is to apply for a credit card. However, it is important to do your research and understanding what offers are out there before committing to a credit card after bankruptcy. It is very likely that you will be presented with very varying rates, some of which can be extremely high.

Consumers beginning their task of rebuilding credit after bankruptcy will be presented with 'pre-approved' credit card offers in the mail. These offers will likely do more damage than good.

Costs, Fees, and Available Credit
It is very common for issuers of credit cards for people with bad credit to charge several fees for card use: account set-up (can be as high as $100), a program fee (typically around $100) an annual fee (usually range from $29-100) as well an participation fee ($50-$100). Another downside is that applicants do not know what their credit limits are going to be until they apply, except that it will be at least $300. With a $300 credit limit and the fees listed above, a borrower will have a higher outstanding balance than available credit! It is important to note that these types of credit cards are going to have higher than normal interest rates as well as harsh fees for going over the limit or making late payments. When so much of your available credit is instantly going to committed towards maintenance charges, fees and interest, extending your credit is going to be easy.

Do Your Homework and Shop Around
As mentioned the rates and terms associated with credit cards after bankruptcy are not going to be too favorable. There are however, companies that you will specialize in providing bad credit credit cards that will help you rebuild your credit without charging any sort of unnecessary fees.

Shopping around means doing your research first. That does not mean that you should apply for multiple credit cards and then determine which one has the best rates. Make sure you always read the fine print! You will not only end up with more cards than you need, having multiple inquiries on your credit is not good. Therefore, it is important that you choose a card with the most favorable terms for your situation and one where approval is likely. There is no point in damaging your credit score by applying for a credit card you can not qualify for. Get more tips for applying for a bad credit credit card.

No matter what credit type you are, you need to consider the key variables when applying for a credit card: annual fees, interest rates, grace periods, and any additional 'hidden' fees. Once you find the card that is right for you, and you begin making charges, it is crucial that you use your credit card wisely. A credit card is one of the best means for rebuilding credit after bankruptcy. However, you don't want to put yourself back in a high-debt situation again.

Using a credit card for rebuilding credit should equate to an improved score and rating after about one to three years on average. You will then be qualified for premium rates and terms for credit cards and other type of credit and loans.


Filing Bankruptcy
How to File Bankruptcy
Getting Credit with a Secured Credit Card
Importance of Credit After Bankruptcy
Six Steps to Re-establishing Your Credit


 

 

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