After experiencing a Chapter 7 or Chapter 13 bankruptcy, you might be on shaky financial ground for several years. Your credit score will have taken a major impact and you may still be trying to find your footing. One of the last things you may want to consider is getting another credit card, since credit card debt might have contributed to your problems in the first place. However, re-establishing good credit is important after a bankruptcy, and responsibly managing a credit card may be one way to achieve this. You and other Fort Lauderdale residents might consider getting a secured credit card at this time.
Secured credit cards, according to Bankrate, differ from other cards in that you put down a certain amount of money as your credit limit. You might want to begin with a $500 limit, and you could later increase your limit by adding funds. In this way, your balance would be covered if you are unable to make payments. This is the main reason why secured credit cards are generally easier to be approved for than traditional credit cards. The interest rates may also be more reasonable.
Why would you want a credit card after recovering from a bankruptcy? Making regular bill payments on time has a significant impact on your credit score. Many vendors, such as car rental agencies and hotels, require a credit card from their customers. You can also choose to pay your monthly expenses with your secured card, and then pay your balance off once a month. In this way, paying utilities and other bills may be easier and more manageable.
A secured credit card is just one of many tools you might employ to re-establish your credit after a bankruptcy. It is important to remember that this information should not replace the advice of a lawyer.