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How To Get A Credit Card One Month Out Of Bankruptcy by Hugh Harris-Evans

Bankruptcy is the black mark that stays longest on your credit record. It will be ten years before it is removed, but this does not mean that you will have to wait for ten years until you can obtain a new credit card. Offers of new credit cards are likely to appear in your mailbox within weeks after your discharge. So the advice is to take your time and not accept the first offer, but to wait until you have received several so that you can compare the terms to get the best deal.

In order to understand why credit is so readily available to people who have only recently been discharged from bankruptcy, you have to look at the way the industry works. The credit card industry is very competitive with a large number of companies all looking for new customers. Discharged bankrupts are part of the larger group of people with bad and problem credit records who form a significant sector of the market for credit cards. As a result special products have been developed for people in this category.

Although your credit report will disclose the bankruptcy for a period of ten years, its negative effect on your ability to obtain credit reduces from day one. In fact a discharged bankrupt is regarded by some companies as a better risk than he was before the bankruptcy since he will now have little or no outstanding indebtedness. Naturally this is on the assumption that such a person is now using credit in a responsible manner by making regular repayments and not borrowing right up to their limit.

The terms offered to a discharged bankrupt for a credit card will be at the bottom end of the scale. These will involve a high interest rate and extra fees including a setup fee and an annual charge. On top of this will be a deposit for the secured credit card which is your most likely option. You pay a deposit to the card company which is held as security for the balance outstanding at any one time and can be used to clear the debt if you default. Your credit limit will normally be the same as your deposit, but as long as you make regular payments you should be allowed to transfer to an unsecured credit card with an increased credit limit.

Following a bankruptcy there will be no difficulty in obtaining a credit card even if it will be expensive. The possession of a card will help in rebuilding your credit score. But to end on a note of caution, if easy credit from too many credit cards contributed to your bankruptcy, take a step back before going that way again.
About the Author

Hugh Harris-Evans writes on financial matters and is the webmaster of Credit Card Cleanup.com where you will find further articles on credit repair and tips on how to make the most of your credit cards.

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