Yes, you can get a credit card after Greensboro bankruptcy
Image Source: Flickr User Philip Taylor
Many of our Greensboro bankruptcy clients want to know what life looks like after they get a discharge of their debts. A primary concern is about their financial future, credit rating, and credit cards. Some people are gun shy after bankruptcy and hesitant to apply for or use a credit card, worried that they might get in over their head again with debt. In fact, a credit card is one of the fastest ways to rebuild your credit after bankruptcy. Here is what you need to know about credit cards after bankruptcy.
Credit Card Abuse Is a Symptom, Not the Cause of Most Bankruptcies
Most people that file bankruptcy have credit card debt. Some have a lot of it. But in most cases, the credit card debt wasn’t the source of the problem that led to filing bankruptcy. A big life event is usually responsible. It may be divorce, a major illness or accident, job loss, or some other event that triggered your increased expenses, decreased income, or both. Once it becomes impossible to service your debt, it’s a slippery slope. Choosing bankruptcy is one of the fastest ways to get relief and get back on track.
In rare instances, people will unwisely run up their credit card debt with no underlying life event trigger. Some people are chronic over-spenders that might need therapy to deal with the emotions driving their unwise spending decisions. However, this is rare and not typical of bankruptcy filers. Most bankruptcy filers are middle to high-income earners that were responsible about their debt until they hit a rough patch in life and saw their finances spin out of control. Fortunately, bankruptcy offers a fresh start.
Credit Card After Greensboro Bankruptcy
After bankruptcy, you might think that you never want another credit card because you worry it’s a gateway to out of control finances. Unfortunately, without a credit card in your wallet, it’s difficult to rebuild your credit. A lower credit score makes it harder to get an affordable mortgage or car loan and can drive up the cost of homeowners, renters and auto insurance, and utilities. It can also make it hard to find a job or move into a rental property. A good credit score is a necessity of life in our time.
A few months after bankruptcy, you can start by researching secured credit cards. Some issuers won’t work with bankruptcy filers, but plenty of them will. You should only apply for a card you’re certain you can get. Approval requirements for various credit card programs are easily available online. It just takes some time to sit down and review your options. Some credit monitoring services will pre-screen offers based on your credit profile and recommend ones for which you will likely qualify.
Walk Before You Run – Then Go Slow and Steady
A secured credit card requires a deposit to a savings account that is used as collateral to pay off your line of credit should you fail to make payments. This is usually the only type of card that you can get at first after bankruptcy. In some cases, depending on how high your credit score was before you filed bankruptcy, you might be able to start out with an unsecured card. After you’ve had your secured card in good standing for a few months, then it’s time to start looking at unsecured card programs.
The best way to keep your credit cards under control is to use them regularly but then pay them off immediately. Don’t use them for anything you wouldn’t ordinarily purchase. Using a card to pay your monthly Netflix or cell phone bill is a good way to keep the card active without accidentally getting in over your head. You should always pay your credit cards in full each month to avoid interest charges.
Also, avoid secured and unsecured cards with high annual fees, setup fees, and other charges that will eat up your initial credit line before you even make a purchase. After you have credit card accounts, your credit score should rise each month with responsible purchasing and payment activities. Periodically adding a new account can further bump your score. Learning how to use credit cards wisely can improve your credit score without putting your financial future at risk.
To find out more about the benefits of bankruptcy to get a fresh financial start, contact the Law Offices of John T. Orcutt. Call 1-888-234-4181 for a free Greensboro bankruptcy consultation at one of our convenient locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington. Be sure to read reviews from satisfied clients and then give us a call about your debt dilemma.