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After bankruptcy, should you apply for new credit cards?

Credit cards can cause debt problems when people do not use them responsibly. This is especially true because the high interest rates can massively increase debt when it is not paid off on time. So, should you consider getting a new credit card if you just filed for bankruptcy?

It actually can be a very good idea. The key is to pay off everything on the card, every single month. Do not leave an unpaid balance and do not miss a payment. Remember, you will likely not be eligible for cards with low interest rates. The bankruptcy on your record means that you are viewed as a credit risk and, as a result, will get some of the highest rates. That does not matter if you pay the card off, but it is a significant problem if you don't.

All that said, if you do use the cards properly, they can actually help you work to repair your credit score. Doing nothing keeps the score low, as lenders do not know if you are a good risk or a bad risk after your fresh start. Taking out small loans on the card and paying them back on time proves that you can make payments and be responsible with debt, which increases your score over time and makes you eligible for more borrowing options and lower interest rates.

The amount of time you have the card also factors into the equation. Therefore, it may be wise to seek out a card and start using it responsibly as soon as your bankruptcy filing is complete.

As you work through the bankruptcy process, make sure you understand all of your legal options and how the filing is going to impact your future.  If you would like to learn more, ask to speak to a bankruptcy attorney at the Quinn Law Firm by calling us at 814-833-2222. 

Source: Card Ratings, "Should you get a credit card after bankruptcy?," Maryalene LaPonsie, accessed April 26, 2018

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