How To Get A Credit Card One Month Out Of Bankruptcy

When someone is made bankrupt this is recorded on his credit report where it will stay for ten years. With such a black mark you might think that no credit card company would look at you during this ten year period. In practice, the chances are that you will be sent offers of new credit cards soon after your discharge from bankruptcy. In this case the sensible course would be to take your time and check all the offers before accepting the first card that arrives. 

To see why credit cards are offered to recently discharged bankrupts, you need to understand how this group are regarded by the credit industry. In a competitive maketplace you will find many companies fighting for new customers and the credit card industry is no different. Because people with bad credit records including bankruptcy constitute a large sector of the market, suitable products have been developed for members of this group.

While the record of a bankruptcy stays on your credit report for ten years, its negative effect begins to diminish rapidly. Some companies regard a discharged bankrupt as a better risk than he was before because he will have few or no outstanding liabilities. But this does, of course, assume that such a person has adopted a responsible attitude to money managment by paying bills on time and using only a small part of his available credit.

Even with a choice of offers, any credit card you obtain following a discharge from bankruptcy will be on far worse terms than you enjoyed before. Most cards will require payment of an annual charge as well as an initial setup fee. The first card you are likely to be offered will be a secured card where you pay a deposit which is held by the card company as security that can be used to repay the loan in the event of a default. The credit limit will usually equal your deposit. After a few months and provided you are in good standing, you should be offered a transfer to an unsecured credit card with a higher credit limit. 

For a discharged bankrupt to obtain a credit card will not be difficult, and will be part of the process of rebuilding his credit score. But if too many cards and easy credit were the cause of his bankruptcy, he would be well advised to think twice before embarking on that course again.