Declaring bankruptcy doesn't mean that you'll never be able to get credit again. In fact, you may find that credit card companies are still sending you offers and applications in the mail! But before you decide to sign up for another piece of plastic, there are some things you should know.
YOU MAY HAVE TO PAY A HIGHER INTEREST RATE
Super low interest rates and zero percent offers are for the best customers with the best credit. Since you've declared bankruptcy, you're a higher risk for the credit card company. And because of that, chances are you'll have to pay a higher interest rate than the average customer. In fact, it's possible your rate will be as much as 5% higher! However, if you remember to pay off your balance each month, the higher rate shouldn't affect your finances.
YOU MAY HAVE TO SECURE THE CARD
A secured credit card requires you to pay a lump sum of cash--typically $250, $500 or more--to the credit card company. This cash is then used as collateral, and is usually the maximum limit on your card. However, if you pay regularly over time, your limit may get raised as you prove yourself a worthy customer. If you don't make payments, the credit card company will use that deposit as payment on your account.
YOU MAY HAVE TO PAY HIGHER FEES
Another way of protecting themselves against the higher risk of a post-bankruptcy customer is by charging a higher annual fee. In most cases, expect to pay about $30 or $40 a year for the privilege of having your credit card. Your over-the-limit fees, late fees and other charges are likely to be higher than average, too. Your terms may also be more stringent, and you may have a shorter grace period (or none at all!). Here is a list of recommended Credit Repair Lenders online. It's important to use a reputable lender online to make sure your personal information is secure.
It is possible to get a credit card after bankruptcy. However, chances are you'll have more costs associated with it, such as higher fees and a higher interest rate. However, if you regularly make your payments on-time, and you pay off the balance every month, your costs should be minimal.
For more information regarding your credit, or for an Absolutely Free Credit Report, ABC Loan Guide can assist you. Also, they have more resources about life after bankruptcy and about Buying a Home and Bankruptcy.
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