Can I Get A Credit Card After Bankruptcy?
One of the questions that we hear the most is if you can get a credit card after filing for bankruptcy. The answer is always a resounding Yes! Filing for bankruptcy is a way for you to start off with a financially clean slate and a fresh start! And that includes credit cards. But there are a few things to keep in mind so you can make the best decision for your financial goals and rebuilding your credit.
Unsecured vs. Secured Credit Cards
Your options after chapter 7 bankruptcy will most likely be with a secured credit card. Secured credit cards are a great way to rebuild your credit. They require you to put a security deposit down that generally equals your credit limit. After some time keeping your account in good standing, that security deposit will either get returned to you when you close the account or are upgraded to an unsecured card.
When you are looking for a new credit card, be sure to compare several options before applying. You want to find the ones with the lowest fees and interest possible for both secured and unsecured cards. Also remember that applying for credit cards does put dings in your credit score so make sure to be selective to which ones you actually apply for.
If you filed for an Ohio Chapter 7 bankruptcy, finding an unsecured card should be fairly easy after the first few months after your bankruptcy discharge have passed. For those who have filed for an Ohio Chapter 13 bankruptcy, depending on the plan that the trustee comes up with, you may already be making payments on existing credit card accounts. That makes it a little more complicated for new banks to accept your application. However, making those payments on time and according to the repayment schedule can help.
Beware of some of the offers coming your way in the mail! Many unsecured credit cards will have very high annual percentage rates, very low credit limits and annual fees. If you do decide to go the unsecured route, be sure to find one with no annual fees and try to pay the balance off in full each month so you don’t incur any interest. Make your money work for you.
Become An Authorized User
If you have a family member or friend who you trust, you can also ask them to add you as an authorized user to their credit card account- without ever giving you a physical card. If you are looking to rebuild your credit after bankruptcy, this is an easy option as their credit card company will add records of on time payments to your credit report. With positive records of on-time payments, your credit score will rise giving you more options down the road for rebuilding your credit. Also be sure to have an agreement with the cardholder as any debt you could incur would ultimately be their responsibility.
Check Your Credit Score
These days, there are many ways to check your credit score for free. You can use apps like Credit Karma, Wallet Hub, or AnnualCreditReport.com and make sure that anything that is wrong gets disputed. Even little things like applying for too many credit cards at once can cause your score to plummet. So be aware how many applications you send in and be sure to make any and all payments to new creditors on time to keep your score in good range.
Most of these apps and websites also have lists of recommended credit cards based on your credit score and income level. They also give approval odds (not guarantees) so they can help you decide which credit cards are best for your situation. This is very helpful as there is so much information out there. They have vetted all kinds of different credit cards and there are user reviews so you can see for yourself how they work and what they can offer.
How Long After Bankruptcy Can I Get A Credit Card?
That depends on which kind of Ohio Bankruptcy you are filing for. You can get approved for a secured credit card immediately. Usually, for Chapter 7 bankruptcy it is about 3 months after your bankruptcy is discharged before you can start applying for unsecured credit cards. If you filed for Chapter 13 bankruptcy, it can be longer.
Should I Get a Credit Card After An Ohio Bankruptcy?
That depends on what you are comfortable with. Getting a credit card usually increases credit scores a lot. Though it’s important to remember that going through a bankruptcy doesn’t make you a failure. Things like medical emergencies, financial disasters or even job losses can make anyone consider bankruptcy. And the good news is that any derogatory marks will fade with time. By continuing to pay your bills on time and using your new credit cards responsibly your credit will improve and low interest credit cards with better perks will be on the horizon. Just be persistent.
After your Ohio Chapter 7 or Chapter 13 Bankruptcy is discharged, there will be a mark on your credit report but your debts will be eliminated and you will have your financial freedom back again! And usually your credit score increases dramatically! The attorneys at Amourgis & Associates have helped many people and families recover from financial hardship so they can get their lives back on track in a dignified way. We are always happy to talk to you about how we can help your situation. We are available on the phone, email or chat on our website. And we even offer a FREE Ohio Bankruptcy Evaluation to get you started. We’re here to help you get your financial freedom back!