Credit Cards For People With Bankruptcy - 5 Ways To Use Them To Your Advantage

Since the recent economic problems the percentage of people who are filing for bankruptcy is increasing. This can be a traumatic experience and it is very easy to wallow in your personal financial problems but the only way that you can rebuild your credit is to take action.

Just because your bankrupt does not mean that you will never be able to apply for a credit card. Although it will be more challenging it is still very possible to get one after a bankruptcy discharge.

However, you can make your life a lot easier with the following tips:

1. Apply For Secured Credit Cards

By being bankrupt your credit rating will more than likely drop like a stone. This means that banks and credit card companies will be checking your credit report and score to determine your credit worth. If your bankrupt or declaring bankruptcy then your credit score will be taking a huge hit. For this reason unsecured credit cards for people with bankruptcy is not a great idea.

The best option is a secured credit card. This is because many issuers do not make credit bureau checks during the approval process. In some cases secured credit card issuers will accept applications if you meet the minimum lending criteria.

Secured cards work by the cardholder providing their own cash to establish a deposit and this amount becomes the  credit limit. This works as long as you have the cash to stump up the deposit.

2. Choose Trusted Credit Card Issuer

It is well known that the credit card market has its fair share of scams. This is especially true when it comes to people who have become bankrupt. In this vulnerable situation they can easy fall to slick scam artists.

There have been a number of cases where people have been charged extortionate fees and interest rates to obtain a card just because they have become bankrupt. Therefore, take the time and due diligence to select a well known and trusted card issuer.

3. Do  Not Exceed Your Limit

One of the key reasons that many people fall into a spiral of bad debt is because they abuse their credit limit. If there is one way to negatively impact your credit rating is to over extend your cards limit.

Many people think that staying within the limit is good enough. However, this is not the case as regularly using over 30% of your  limit can downgrade your score. Therefore, it is recommended that you should only use 30% or less of your credit limit. For example if you have a limit of $1500 then, your real limit is $450 or less.  

4. How To Reduce Your Credit Card Fees

One thing you will find with either a chapter 13 or chapter 7 bankruptcy is that credit cards are far more expensive. There fees are higher and can include processing fees as well.  You can always shop around but no matter which card you go for you should expect to pay more in fees compared to a standard credit card.

The best strategy to follow is find a card that will accept you. Use that card wisely for the next 10 to 12 months. At the end of this period you should have improved your credit history. This is the time to start looking for a credit card with as few fees as possible.

 5. Choosing Credit Cards For People With Bankruptcy

With more people experiencing bankruptcy the top banks and credit card issuers are introducing more secured credit cards after bankruptcy that can make it easier for people to rebuild their credit ratings.

Here are a 2 examples;

• Orchard Bank MasterCard
• Applied Bank Platinum Zero Card

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