Becoming a Credit-Savvy Consumer Post-Bankruptcy: Part 1

Becoming better with credit post-bankruptcy can be a daunting task for many clients. You’ve repaid or dissolved your existing debts, and are about to close your bankruptcy case with a new and improved outlook on your financial life. Unfortunately for many in your position, even well-intentioned Americans can return to their debt-full ways, even after the many lessons learned from their bankruptcy filing.

As a result, it’s important to take a first (or possibly second) look at the best ways to break the cycle of debt, this time for good! Five sound (but simple) strategies include:

(1) Bank on it.
Banks inevitably issue real credit offers. And issuing banks should be listed clearly on all these credit offers. As a result, if you receive any offers without this information, ignore them. Post-bankruptcy debtors, clamoring for credit, are often lulled into scams from con artist credit providers that are, in reality, not worth banking on.

(2) It’s in Your Best Interest to Seek the Best Interest Rates.
While It goes without saying that the lower the interest rates on your credit cards, the better, it’s worth reiterating that bank credit cards (those with the VISA or MASTERCARD logo attached) will inevitably have lower interest rates than store credit cards, which may seem easier to get post-bankruptcy. Avoid these retail rates and stick to cards that won’t burn you when carrying a balance.

(3) It’s Best to Avoid “Buying Now” or “Paying Later.”
The now ubiquitous “buy now, pay later” offers can seem like veiled versions of the popular “layaway” programs; but instead of paying down a little bit of money at a time, you buy now with the assumption that you’ll remain accountable enough to save for a large payment at a later date. Don’t. Often banking on more money coming in when your tab actually comes do is a losing proposition that often gets problem debtors in even more financial trouble, this time with large “back interest rates.”

(4) Finding the Fine Print.
Credit applications are notorious for making “fine print” look almost as indecipherable as Sanskrit. But it pays to read between the [fine] lines, as these pint-size paragraphs often contain clauses pointing out how creditors can make “sudden” changes to your agreement.  Pay special attention to (i) what interest rate you will be charged; (ii) what the “grace period” is before interest begins accruing; and (iii) what are the fees and penalties involved in opening this line of credit. If there’s anything you don’t like, keep looking.

(5) Keeping Abreast of the Current Interest Rate
Not many people know this, but the interest rate on new credit applications can essentially be a year or more out-of-date at the time you receive it. As a result, it’s more than a little worth it to call the credit card company and request the “current” interest rate before you sign your card agreement. This also applies to the interest rate you can be charged if you miss a month’s payment. Obviously, in this case, knowledge is most certainly power.

And remember, if you’re drowning in credit card debt, knowing a qualified bankruptcy attorney can help you face many of your financial fears, yielding the right kinds of support, information and insights—at a low cost— for a viable and secure future beyond all of the things in store in 2011.  The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to +1-833-627-0115, or make an appointment online at www.billsbills.com.