Bankruptcy need not be the end of your ability to borrow money or have credit extended on your behalf. Although it does take some time to rebuild your borrowing reputation and restore your credit to its once former glory - it can be done and one of the best ways to begin your rebuilding process is to obtain credit cards as soon as possible after bankruptcy discharge is complete.
Easy To Obtain
The easiest to obtain type of credit card that you can get once you have filed bankruptcy is the secured one. It works just the same as a normal card that you might get from any issuer - and it will usually bear the Visa or Mastercard logo. You can use it anywhere that accepts the card brand to make purchase at the point of sale or to withdraw cash from an automated teller machine (ATM).
In addition, you can also take cash advances upon it. The best feature is that it will report either monthly or quarterly to the three major credit reporting bureaus in the United States - Experian, Trans Union, and Equifax. Thus, by making timely payments on your account, you will be adding valuable points to your credit score all the while building your credit report up to make you appear to be more appealing to potential lenders.
Refundable Deposit
To obtain your secured credit card post bankruptcy, you will be asked by the issuer to place a deposit that is equal to the amount of credit that you wish to have extended to you. Your deposit will draw interest, in most cases, and will be returned to you at the end of a specified period of time - providing that you have made all payments as required; at the same time that your deposit is returned, your account would revert over to a normal account. The deposit will stand good in the instance that you should default from your original agreement - and will be used to cover any outstanding balance that you might have should you default. This would mean that you forfeit your deposit amount.
Managing Your Credit Card
You may elect to get more than one secured credit card. Having more than one will definitely add more points to your score with proper usage. Using it to your best advantage can take a bit of juggling numbers - but should be easy to learn after a couple of months. You should use no more than 50% of your available credit line, and you should always run a balance of 30% of the total amount of available credit each month.
For example, for a secured credit card with a $1,000 credit line, you should charge no more than $500 in one month, and pay off all that you have charged except for $300, during the billing cycle. This is the fastest method to add points to your credit score. Your wise usage can move you forward to better cards with reduced interest and higher credit limits.
Online Secured Credit Cards
The Internet has become the number one source for obtaining credit cards of all types. Secured credit cards are readily available through online card issuers who deal with bad credit and bankruptcy borrowers everyday. Find your best interest rates with an online lender today.
