Yes, there are several options available. While technically not a credit card you may be able to use a bank or debit card to perform activities for which you normally would use a credit card. You also may be able to keep the credit card you already have if the creditor grants approval.
In addition, no law prohibits you from obtaining a credit card after you file a bankruptcy petition or receive a bankruptcy discharge. Whether you will be given a credit card depends upon the provider that issues the card for which you apply. Because a bankruptcy generally appears on your credit report for ten years, credit card providers will be able to take your bankruptcy into consideration when you apply for a card.
What you should know before you apply for a credit card?
Some companies are inclined to issue credit cards to applicants who recently obtained a bankruptcy discharge because they know those applicants will not be able to receive a new discharge in the near future. In fact, some companies research bankruptcy filings and solicit business from individuals who were recently granted a bankruptcy discharge. You should do some research, however, before you accept one of those offers.
Credit card companies that solicit customers who recently filed bankruptcy often charge very high interest rates or charge a high annual fee to maintain your account. The limit on the amount you can charge is often quite low compared to the annual fee that you must pay to keep the card. Even if the card offers a low introductory interest rate, it might provide for a drastic rate increase a few months after you start using it. Spend some time comparing credit card offers so that you understand the interest rate, the fees, and the debt limits that apply to each card.
To avoid high interest rates and high annual fees, you can ignore the offers you receive in the mail and instead apply for credit cards that offer reasonable terms. You can search online for websites that allow you to compare different credit cards. In many cases, when you find a card with attractive terms, you can apply online.
The credit card company might decline your application because of your bankruptcy, but it might agree to issue you a card with a low credit limit. Be careful not to apply for several cards at once, however, because each application will show up on your credit report and too many applications will result in a lowering of your credit score.
Secured Credit Cards
If you want a credit card and cannot find one with a reasonable interest rate, you can consider a secured credit card. A secured credit card requires you to deposit money into a saving account. Your credit limit will be set at a percentage of the amount you have on deposit.
If you do not make at least the minimum payment on your monthly bill, your credit card debt can be deducted from your savings account. While interest rates on secured credit cards are often lower than the rates on unsecured cards, some secured credit cards charge a high annual fee and/or a processing fee. Again, you should do some research and compare terms before you apply for a secured credit card.
Benefits of a Credit Card
Even a credit card with a high interest rate can be beneficial if it has no annual fee (or if the annual fee is reasonable) and if you use it wisely. Obtaining a credit card, whether secured or unsecured, is a useful way to rehabilitate your credit score. If you are able to obtain a credit card, make sure that you avoid incurring more charges than you can pay at the end of the month. By paying the card in full and on time each month, you not only avoid interest charges, you demonstrate your ability to use credit responsibly. Over time, that will translate into an improvement of your credit score.
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Bankruptcy is complex and many answers depend upon your specific situation. If you still have questions you can schedule a free consultation with a bankruptcy attorney.
