Why You Should Get a New Credit Card ASAP After Filing for Bankruptcy

For far too many consumers, credit cards are what eventually put their finances over the edge, forcing them to file for Chapter 7 or Chapter 13 bankruptcy. Some people find themselves in debt from out of control credit card spending. Others use their credit cards as a last-ditch attempt to cover other debts and monthly costs they can’t keep up with.

Whatever led to debt troubles in the first place, chances are credit cards didn’t help the situation.

That’s why so many people are surprised to hear this advice: Sign up for a new credit card as soon as possible after filing for bankruptcy.

credit card

Just Like Starting Over

Like it or not, your credit score plays a big part in how you’re able to live your life. As much as you might like to, you can’t simply ignore it.

The good news: Your credit score is a fluid number. There are things that influence it positively and things that influence it negatively. After your credit score suffers a blow like filing for bankruptcy, most experts agree the best thing you can do is to start working to improve your score right away.

A new credit card is one of the best ways to do just that.

First Steps

Right after you declare bankruptcy, there’s a good chance the only kind of credit card you’ll be able to get is a secured credit card. With these cards, you have to pay a deposit that sets the amount you’re allowed to borrow against (often new cards start with $500 collateral).

That makes these cards more similar to a debit card in some ways, but it’s a good place to start.

Look for a secured credit card that:

  • Reports your payment history to all three major credit reporting agencies
  • Has reasonable fees and rates (no more than $50 or $75 a year).

But once you return to the credit game, it’s absolutely essential that you pay your debts on time — every single time. One missed payment — even if it’s just a few days late — can set you back months in rebuilding your credit.

Credit Scoring

Finding the Best Options

The internet is full of “experts” offering to tell you the best credit card for people with bad credit or a recent bankruptcy filing.

But be careful: Many of these sites are sponsored by specific credit card companies. That doesn’t mean the advice is bad, but it should be taken with a grain of salt.

Once you have established a track record with a secured card, you can start looking at unsecured options. Lots of people start with credit cards from a major retailer, which are often easier to get but don’t have a ton of fees.

As with all credit card dealings, make sure to read the fine print so you understand what you’re agreeing to. And once you agree to it, make sure you hold up your end of the deal.

If you, or someone in your family, is going through financial hardship, bankruptcy may be the solution to stop creditor actions and erase your money problems. Contact our law offices today for an immediate consultation with our experienced bankruptcy attorneys. This is one opportunity you simply cannot afford to miss.