When it comes to getting credit, declaring bankruptcy is not the end of the world. As a matter of fact, you may start to receive a ton of credit card offers right after you've discharged your debt. Before you accept their offers, here is a few things to keep in mind:
1. The Interest Rate Will Be High
Now that you have declared bankruptcy, you will be seen as a higher risk to the credit card companies. The ads for no interest cards and rewards cards, do not apply to you. You can now expect to pay a much higher interest rate than the average consumer. On the bright side, if you are a responsible card holder and pay off your balance at the end of each and every month, it won't matter how high that interest rate is.
2. The Fees Will Be High
Again, you are seen as a liability to the credit card companies. For that reason, you will be expected to pay annual fees that can run anywhere from $30 to $75 a year. The privilege of owning a bankruptcy card will likely also come with steeper over-the-limit and late fees, too. On a positive note, you are only using bankruptcy credit cards to establish your credit. Once this is achieved, you can ditch the cards that charge high fees and switch over to companies that make better offers available to you.
3. You Probably Have To Go The Secured Card Route
Secured cards are much like the debit card you get from your bank. You set your spending limit by depositing cash into the account. A secured card is a good option for those looking for credit cards after bankruptcy because these cards are reported to the various credit bureaus. You must not forget that it is important to play nice with these credit reporting agencies because they have the power to raise your credit score.
I can not stress enough the importance of reading the fine print before you sign up for any credit card. The idea of having credit is very appealing, I'm sure, but it comes at a cost. Ironically, in order to reestablish your credit, you must find a way to put yourself into a little debt.
No comments:
Post a Comment