The Costs and Fees
After declaring bankruptcy, that declaration stays on your credit record for 10 years. This can lead credit card companies to offer you credit at high interest rates and/or with significant fees, if they offer you credit at all.
Ask about a secured credit card. Secured credit cards work like debit cards in that they require you to make a deposit before you’re able to use the card, and you only take out the money that you put in, essentially.
According to David K. Musto, Associate Professor of Finance at the Wharton School, University of Pennsylvania, based on his research into the credit histories of those who have filed for bankruptcy and then completed the 10 year probationary period, “the bankruptcy flag has a big effect on the access of the more creditworthy past filers; when they lose their bankruptcy flags, their credit scores jump substantially and they open new credit relationships, high-limit bank cards in particular, quickly. Subsequently, the score-increases mostly reverse and delinquency is abnormally high.”
Therefore, exercise caution when investigating credit cards after bankruptcy. You may want to avoid luxury shopping areas like The Galleria, where you may be tempted to make purchases outside your budget.
Things to Consider Before Getting a Credit Card After Bankruptcy
If you decide to get a credit card after bankruptcy, consider the following issues:
- Introductory rates. Understand your interest rate, especially if it’s set to change after a certain period.
- Late and annual fees. Beyond the interest rate, what are the late fees? Is there any grace period? Is there an annual fee? Can any of the fees be waived?
- Don’t open too many cards. A credit card may help you rebuild credit, but do not accept any and all offers that come your way. This could be a dangerous situation that allows you to backslide into debt accrual.
- Should you wait? Depending on the specifics of your case, your Plano bankruptcy attorney may advise you wait before applying for a new card.
So, who needs a Plano bankruptcy lawyer?
Bankruptcy can be confusing and some may not understand all of the implications. If you are considering getting a credit card after bankruptcy, consult a Plano bankruptcy attorney. Contact an attorney at Warren & Migliaccio Attorneys at Law for a free consultation. Call 888-584-9614.