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Should I Get a Credit Card After Bankruptcy?
Once you file Chapter 7 bankruptcy, you will be flooded with new credit card offers. It may seem counter-intuitive, but you should get a credit card after bankruptcy.
Credit card companies are not doing you a favor. Once you receive a bankruptcy discharge, you actually become an excellent credit risk. After all, you have zero debt, and you can’t declare another Chapter 7 for eight years. I get the question from clients all the time: “Should I get a credit card after bankruptcy?”
Yes, you should get a credit card after bankruptcy
One of the very best ways to improve your credit score post-bankruptcy is getting a credit card. And you must also use it. Try to get one as soon as possible after receiving your discharge. Be sure to compare the rates and fees of the offers you receive. You should shop around online, too.
By using your credit card, instead of cash, then paying off the balance each month, you will get the beneficial reporting to credit bureaus that you pay your credit card balances on time. Not missing a payment is crucial here.
If your credit history does not allow you to get an unsecured card, then get a secured card. Be sure to find a secured card that actually reports to credit bureaus. You may have to check with the issuing bank to ensure that they will report. After a few months of responsible usage on a secured card, many companies will allow you to switch to an unsecured card, or will issue you an additional card.
Careful how you use your credit card
You should try not to carry a balance because interest rates, post-discharge, will be quite high. Charge only what you know you will be able to pay off in full each month. Be sure to make at least the minimum payment, or your report will be dinged. Remember, the whole point is to get month after month of on-time payments reported to the credit bureaus, TransUnion, Equifax, and Experian.
Learn to trust yourself again
The only reason not to get a credit card after bankruptcy is if you feel you lack the self-control to pay off the balance each month. You have to learn to trust yourself again, to trust your self-discipline.
Most of the clients that I represent are hard-working people who filed bankruptcy because of unforeseen circumstances, such as loss of income, divorce, or medical problems. For even those clients who were forced into bankruptcy due to overspending, by the time they are finished with the bankruptcy process, most have “learned their lesson.” So there is no sense in foregoing the positive effects on credit that timely payments to a credit card can have.
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Brian Lee from Lee Legal was an amazing attorney to work with. He took his time, reviewed my documents and we discussed my situation thoroughly. He explained the process and my options as well as gave his recommendation. Not only did he assist, but he ensured that I knew this...
I was very nervous and scared about going through this process. But Brian was very knowledgeable and helped me through it. I was notified about any and all updates to my case and he was very responsive when I had questions regarding any concerns I had. Although a bit nerve...
Brian provided me with a very detailed analysis about my potential case after our first consultation. He promptly responded to all my complex questions, especially navigating student loans and some tax discussions. He is very professional and experienced at what he does, I would...
I've had the pleasure of working alongside Brian V. Lee for several years, and I can say without hesitation that he is one of the most knowledgeable bankruptcy attorneys in the DMV area. Brian's command of Chapter 7, 11, and 13 practice is exceptional, and his clients in the DC...
Brian has the amazing talent of taking complicated legal matters and distilling them down to seamless, frictionless resolutions. He is a phenomenal problem solver and a trusted advisor.
Brian is both warm and professional. He helped me navigate a financial issue that I had not been looking forward to working on and he made the entire experience non-stressful, receiving a lot of anxiety I had around the matter. He is straight forward and a fantastic problem...
I had the opportunity to work with Brian at a time when I was challenged by a professional setback and forced with the challenge of making some very difficult legal decisions. Additionally, I worked with him again as I was dealing with some financial issues pertaining to my...
Still several years from Public Service Student Loan Forgiveness and saddled with significant student loan payments in proportion to my income, I came to Lee Legal to explore the bankruptcy path. Through his counsel, Brian took the fear out of the process and helped me to...
