Are Credit Cards After Bankruptcy A Dangerous Choice?
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.
However regardless to what some may think obtaining a credit card after bankruptcy isn't impossible. There are companies willing to provide this although normally you can expect high interest rates and additional annual fees.
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.
Credit cards after bankruptcy are very often offered by companies supposedly as an option to help rebuild ones credit rating. People will very often pick these cards up in the hope of getting back on their feet. This is despite the fact that total annual fees can sometimes even equal that of their initial credit limit.
Troubles Can Keep Adding Up
Unfortunately, if you have a credit card after bankruptcy, and the initial fees, for example, are $290, and their initial credit limit is $300, being even a day late with the payment will result in a late fee of, on average, $30.
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!
In addition to the new debt, the interest rate on the card can quickly go to the maximum allowed by law because you failed to meet your obligation on the credit card after bankruptcy.
You also would have no way out except to pay the balance on the card and some companies will make the demand that the balance be paid in full within 30 days or face collection action.
Wage garnishment, court proceedings and daily phone calls are just some of the things you can expect from here on in and it could well be years before you manage to clear up all your debts.
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. - 23159
However regardless to what some may think obtaining a credit card after bankruptcy isn't impossible. There are companies willing to provide this although normally you can expect high interest rates and additional annual fees.
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.
Credit cards after bankruptcy are very often offered by companies supposedly as an option to help rebuild ones credit rating. People will very often pick these cards up in the hope of getting back on their feet. This is despite the fact that total annual fees can sometimes even equal that of their initial credit limit.
Troubles Can Keep Adding Up
Unfortunately, if you have a credit card after bankruptcy, and the initial fees, for example, are $290, and their initial credit limit is $300, being even a day late with the payment will result in a late fee of, on average, $30.
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!
In addition to the new debt, the interest rate on the card can quickly go to the maximum allowed by law because you failed to meet your obligation on the credit card after bankruptcy.
You also would have no way out except to pay the balance on the card and some companies will make the demand that the balance be paid in full within 30 days or face collection action.
Wage garnishment, court proceedings and daily phone calls are just some of the things you can expect from here on in and it could well be years before you manage to clear up all your debts.
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. - 23159
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Also see Can I Get A Mortgage After Bankruptcy or visit this site to read more about all the Types Of Bankruptcy
posted by X - Men @ 5:03 AM
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