Credit Cards After Bankruptcy

Credit cards after bankruptcy are not impossible to acquire. Having a bankruptcy on past financial history doesn't restrict one from being approved for credit cards. Some lenders require a security deposit from applicants who apply for credit cards after bankruptcy by having the consumer deposit money into a bank account that matches the available balance on the card. This provides security to the lender in case of default.

Oftentimes consumers find themselves in a debt situation due to overuse of charge accounts. Credit card debt is the number one debt problem faced by most people. It might not be wise to apply for new credit until counseling has been sought and the consumer understands the danger. Financial counseling will help in learning to budget money and live within one's income. Make a list of all debts and income to see a clear picture of monthly obligations. Make a detailed monthly budget and stick to it as close as possible.

Consumers will do best to start out with a low credit limit on charge accounts. Acquiring charge cards with a low limit is a good way to learn how to handle money. Use charge cards only for emergencies or be committed to pay off the balance in full each month to avoid high interest charges. Credit cards after bankruptcy can be used to secure things like rental cars, hotel rooms, and make online purchases. Use wisdom when using charge accounts. It is easy to get back into debt even after filing bankruptcy. "There hath no temptation taken you but such as is common to man: but God is faithful, who will not suffer you to be tempted above that ye are able; but will with the temptation also make a way to escape, that ye may be able to bear it" (1 Corinthians 10:13).

Interest rates for charge accounts after bankruptcy are usually very high. Having a bankruptcy on financial history will lower scores and lenders will see the consumer as a high risk. Some lenders offer credit cards after bankruptcy through unsecured charge accounts. Lenders usually offer low start up credit limits and high interest rates to consumers with questionable financial history. There may also be annual fees and monthly maintenance fees associated with this type of account. If the consumer decides to apply for this type of charge account and is approved it is wise to keep limits low and pay off the entire balance each month to avoid having to pay high interest and fees.

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