Applying for a Credit Card after Bankruptcy
According to the website uscourts.gov, there have been 967,831 bankruptcy filings in the United States since June 30, 2008. As times continue to get tougher it is almost certain that more people will be forced to file for bankruptcy as well. The good thing is that tough times do not last; tough people do. There is light at the end of the tunnel for those who have been forced to file for bankruptcy. The following guidelines are a good way for consumers to obtain a credit card after having filed for insolvency.
Many people are often forced to file for bankruptcy due to medical bills and the loss of a job. The other major reason for people filing for bankruptcy is overspending. If you are one of those individuals forced into bankruptcy due to poor spending habits, you might want to avoid credit cards or keep your credit cards under lock and key. The first thing you want to make sure is whether or not you are financially able to handle another credit card Be sure that you have a sustainable income that can cover all your basic expenses like mortgage payment, utility bills, car payments, food and other basic necessities that you require to live. Also be sure to have at least 6 months of living expenses saved up in case of another emergency.
Once you have determined that you are capable of paying your credit card again, you need to find the right card to get your credit back on track. The best option is to apply for a secured credit card with a limited limit such as $300. A good example is the Bank of America Secured Visa card. This card allows is customers to obtain a line of credit from $300 to $10,000. The card is secured with a deposit equaling the amount of credit you are trying to secure. This ensures credit card issuers will recoup their money should the card holder default. Once you have obtained your secured credit card; be sure and manage it correctly. Only charge what you are planning to pay in full. Pay your bill on time every month. Your credit score will begin to rise should you handle your credit cards correctly. In addition, after some time, it is very possible that your secured card will turn into an unsecured credit card. In all, managing your credit card correctly will help your overall credit and save you money on other loans with lower interest rates.
Another way to obtain a credit card after bankruptcy is to use someone else’s credit to improve your own. In other words, you can try to find a suitable co signor with good credit. This could be in the form of a friend or family member. Another way to obtain your own credit card is to become an additional card holder on someone else’s account. Make the payments on your own to the card issuer in order to show that it is you who is actually paying the bill. Also, be sure and pay the bill on time and in full every month as well. This will show that you are capable of being credit worthy. In the future you will be able to obtain a credit card on your own from the same card issuer because they have already established a good working relationship with you.
Bankruptcy should be an option taken only for very desperate measures. However, should you be forced to file for bankruptcy due to unforeseen circumstances, it is not a financial death sentence. It is possible to obtain credit for cars, homes as well as credit cards. A secured credit card is a great way to get off to a new start. If you are fortunate enough to have the help from friend or family members, a co signor can also help you obtain credit again. Be sure to pay the card yourself and on time should you become an additional card holder on someone else’s account. Most importantly, be sure that you have enough disposable income to pay your credit card balance in full every month. Following these guidelines will certainly help your ability to obtain additional credit after bankruptcy.
According to the website uscourts.gov, there have been 967,831 bankruptcy filings in the United States since June 30, 2008. As times continue to get tougher it is almost certain that more people will be forced to file for bankruptcy as well. The good thing is that tough times do not last; tough people do. There is light at the end of the tunnel for those who have been forced to file for bankruptcy. The following guidelines are a good way for consumers to obtain a credit card after having filed for insolvency.
Many people are often forced to file for bankruptcy due to medical bills and the loss of a job. The other major reason for people filing for bankruptcy is overspending. If you are one of those individuals forced into bankruptcy due to poor spending habits, you might want to avoid credit cards or keep your credit cards under lock and key. The first thing you want to make sure is whether or not you are financially able to handle another credit card Be sure that you have a sustainable income that can cover all your basic expenses like mortgage payment, utility bills, car payments, food and other basic necessities that you require to live. Also be sure to have at least 6 months of living expenses saved up in case of another emergency.
Once you have determined that you are capable of paying your credit card again, you need to find the right card to get your credit back on track. The best option is to apply for a secured credit card with a limited limit such as $300. A good example is the Bank of America Secured Visa card. This card allows is customers to obtain a line of credit from $300 to $10,000. The card is secured with a deposit equaling the amount of credit you are trying to secure. This ensures credit card issuers will recoup their money should the card holder default. Once you have obtained your secured credit card; be sure and manage it correctly. Only charge what you are planning to pay in full. Pay your bill on time every month. Your credit score will begin to rise should you handle your credit cards correctly. In addition, after some time, it is very possible that your secured card will turn into an unsecured credit card. In all, managing your credit card correctly will help your overall credit and save you money on other loans with lower interest rates.
Another way to obtain a credit card after bankruptcy is to use someone else’s credit to improve your own. In other words, you can try to find a suitable co signor with good credit. This could be in the form of a friend or family member. Another way to obtain your own credit card is to become an additional card holder on someone else’s account. Make the payments on your own to the card issuer in order to show that it is you who is actually paying the bill. Also, be sure and pay the bill on time and in full every month as well. This will show that you are capable of being credit worthy. In the future you will be able to obtain a credit card on your own from the same card issuer because they have already established a good working relationship with you.
Bankruptcy should be an option taken only for very desperate measures. However, should you be forced to file for bankruptcy due to unforeseen circumstances, it is not a financial death sentence. It is possible to obtain credit for cars, homes as well as credit cards. A secured credit card is a great way to get off to a new start. If you are fortunate enough to have the help from friend or family members, a co signor can also help you obtain credit again. Be sure to pay the card yourself and on time should you become an additional card holder on someone else’s account. Most importantly, be sure that you have enough disposable income to pay your credit card balance in full every month. Following these guidelines will certainly help your ability to obtain additional credit after bankruptcy.
Labels: apply for a credit card, applying for a credit card after bankruptcy, credit card, credit card issuers, credit cards
Credit Card / Financial news blog post by Todd Holliday at 7:42 PM 