Tips for Securing Low Rate Credit Cards When You Had a Previous Bankruptcy
Many people who are forced to declare bankruptcy fear that they will never have a decent credit card again. They may quite reasonably assume that because their bankruptcy stays on their credit record from seven to ten years, that they will be forced to pay outrageous interest on a credit card or else be refused outright.
Yet, this is not necessarily true. Many people who declare bankruptcy are startled to discover that they still receive credit card offers in the mail. That is because in a odd way bankruptcy can actually make you more appealing to credit card companies. After all, your bankruptcy means that you have been cleared of your most crushing financial obligations and are actually now in a position to spend more freely than when you were buried in debt. You may also have learned a few hard financial lessons that will make you better at handling your money in the future than you did in the past.
So the good news is that credit card companies will not write you off their mailing lists after you file for bankruptcy. There is no harm in responding to these offers and who knows, maybe they will accept you. However, the bad news is that they are likely to want to charge you high interest rates. After all, you may be cleared of your debts and have learned some fiscal lessons, but how can the credit companies be sure you have changed? The only way to demonstrate that is to prove it to them by your actions.
That is where secured credit cards can come to your rescue. A secured credit card is one where you deposit money into a saving account before your credit limit is set. That limit will be only a percentage of the amount you deposit, depending on your full credit history. Whatever the amount, by always paying on time and otherwise using the card responsibly you will improve your credit ratings. An improved credit rating is the key to obtaining low rate credit cards that are unsecured. Unsecured cards are the ones you used to have that let you borrow without a deposit.
Once you have established a record of at least six months of flawless use of your secured card, you may then attempt to contact companies or respond to offers for unsecured cards. All you need is one acceptance and you can then close your secured account. At last you will have an unsecured credit card without those outrageous interest rates.
Recovering from bankruptcy is a process with no overnight solutions. But a diligent effort to repair your credit with a secured card is the fastest route back to the types of unsecured cards you once had. Hopefully, you have learned from your bankruptcy and are determined to do things differently in the future. If so, then you can prove it by carefully using a secured card as a stepping stone to obtaining a low rate unsecured credit card. In doing so, you may discover that you can bounce back from bankruptcy faster than you thought.