Are you considering getting credit cards after bankruptcy discharge? Your bankruptcy court date has come and gone, and your bankruptcy is complete. Now, you are ready to start rebuilding your credit. There are some things that you want to carefully think out, however, to be sure that you do not get back into the dire financial situation that you just got out of. What do you need to consider?
How Are You Going to Use the Credit Card?
Are you going to use it for products that you normally buy with a debit card or with cash? This is the smart way to think about your credit card usage, as you are buying what you normally purchase, rather than buying things that you cannot afford. Convenience is another reason for credit use, as some things need to be purchased online, such as airplane tickets, booking a hotel, etc.
Evaluate Why You Went Bankrupt
Bankruptcy can be filed for many different reasons. Many times, people choose bankruptcy because their finances became uncontrollable due to medical bills, divorce, or extended unemployment. Credit cards may become the “go to” way to make ends meet, which can cause even more financial stress. A way to protect against this happening again is to have at least 2 month’s salary saved before you get a credit card. Then you want to pay off the balance every month for at least a year to build a good credit rating. If you can meet these goals, then you are ready for a credit card.
If, however, your bankruptcy was due to bad decisions and poor habits in dealing with your finances, you may want to hold off on a credit card to be sure that you have truly changed your ways. If you are able to take some personal responsibility for the bankruptcy, then you could be on your way to being ready for a credit card.
What Do You Need to Look for In a Credit Card?
When you are ready to start looking for a credit card to apply for, be sure that you evaluate the choices that are out there. While you may not be able to get the lowest interest rate, you should be able to get one that does not have an annual fee – if you are willing to look for one. Make sure as well that it is a major bank card that you can use anywhere, rather than a store card.
Credit cards after bankruptcy discharge can help you to rebuild your credit rating to ensure that you will be able to make bigger purchases, such as a home or car, in the future without having to overpay.