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When choosing a post-bankruptcy credit card, shop around

When you emerge from bankruptcy, it will take some time to rebuild your credit. One of the steps you may decide to take is to get a credit card.

Even if credit card debt was part or all of what led to your bankruptcy, a credit card, used sparingly and paid off every month, can be a good way to help with your credit rebuilding process. You may see an improvement in your credit score within six months if you use your card responsibly and avoid getting into any other financial difficulties.

Fortunately, there are cards designed for people with low credit scores. If you shop around, you should be able to find one without high fees or interest rates. Some have no annual fee. Be aware of whether they charge transaction fees as well.

Of course, as noted, you should be paying it off in full and on time every month. If you do, you don't need to worry about interest rates or late fees. However, you should still note what these are on any card you consider.

Secured credit cards are designed for people with poor credit or who haven't built up a credit record yet. They're good for people who are learning to use credit responsibly because your credit line is the amount of the refundable security deposit you put down. Another advantage of secured credit cards is that most companies that issue them don't run a credit check, which can add a ding to your already struggling credit score.

If you're ready to get a credit card, it's a good idea to compare and read the fine print. Your bankruptcy attorney or a financial counselor can also provide some recommendations to help you select the best card for your needs.

Source: Wise Bread, "Best Credit Cards to Rebuild Credit After Bankruptcy," Ashley Eneriz, Sep. 02, 2016

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  • NACA | National Association of Consumer Advocates
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