Can I Get A Credit Card After A Bankruptcy Filing?

By Jamey Smith

In spite of the stigma and possible embarrassment of filing for bankruptcy, many folks have mitigating circumstances that make it often their only option to bypass repeated court proceedings against them. One thing that often worries these people is the obtaining of a Credit Card after Bankruptcy.

Neither the less, there are some financial companies that have no trouble offering to issue a person a credit card after bankruptcy, although usually with a higher interest rate and annual fees attached.

Did you know that once you have filed bankruptcy you cannot do so again for an additional seven years? This is why you will find some companies willing to provide you with a credit card.

Knowing this, these credit card companies have a legal recourse in collecting on any unpaid debt resulting from the card's use. While most debt charged on a credit card is considered unsecured, if the cardholder cannot file bankruptcy, the company can use wage attachment to gain repayment.

However as you will see it is one thing to obtain a credit card after bankruptcy but it is another to be able to use it safely. The danger is that with higher interest rates and extra fees on late payments you can quickly end up back in a bad credit situation.

Many companies offering a credit card after bankruptcy offer it as a help in rebuilding a credit rating and even with annual fees as well as processing fees, sometimes equaling the initial credit limit, people take them out hoping to get back on their financial feet.

For some things quickly get worse and worse

To put things into perspective let us say for example that your credit card after bankruptcy annual fees are $290 and your initial credit limit was $300, if you were only one day late for a payment you can expect on average to end up paying $30 as a late fee.

In turn this would push-up the liability to $320 which would cause another $30 fee for being over the limit, this means that the credit card holder would now have a debt of $350!

To make matters even worse the interest rate on this card could quickly add up on the maximum that is allowed by law since the obligations on the credit card after bankruptcy were not met.

There really is no way out either, with the exception of paying the balance on the credit card. Quite a lot of companies demand that the payment be made within 30 days and if that does not happen you would face collection action.

Daily phone calls, court proceedings, you name it, from here on in things can really get ugly and fixing the mess often takes several years.

So as you can see although it is possible, it comes with some possible hefty consequences! The bottom line is, it will depend on your situation and your ability to keep in check on your payments as to whether it would be for you or not. - 23229

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Now go read Mortgage Loan After Bankruptcy or visit our blog to read more about all the Different Types Of Bankruptcy