credit card

Credit Card Use After Bankruptcy

By Derek Prosser

Filing for bankruptcy can be a really difficult decision for many reasons. One reason is that it can greatly harm your credit. The good news is that it is definitely possible to rebuild your credit over time. Having a high credit score can open up a world of opportunity. That’s why getting back to a higher score is imperative. Luckily, there are many ways that you can do this. One such way is by using a credit card responsibly. 

While they may have different rules to go by, it’s important to know that people are often still able to obtain a credit card even after filing for bankruptcy

Sub-prime Credit Cards 

While standard credit cards may temporarily be out of the question for a period of time, individuals with a low credit score may be able to obtain a sub-prime credit card. A sub-prime credit card works by depositing a certain amount of your money onto the card, which is then treated as the balance limit to the card.

However, it’s especially important after bankruptcy that you do your homework before opening any credit card – no matter the type. This is because many sub-prime credit card companies have fees. Even if someone is able to get an unsecured credit card, it’s important to watch out for high-interest rates.

Use Your Credit Card Responsibly

It’s important that you understand how to responsibly use your credit card so that you don’t end up in a similar situation to the one you were in when you had to file for bankruptcy. Here are some helpful tips for responsible credit card use:

Only Spend your Balance

While it may be frustrating that your sub-prime credit card has a lower balance threshold, it’s important that you adhere to it to build your credit slowly over time. The inconvenience will pay off in the long run if navigated properly.

Start Saving

Bankruptcy can be extremely helpful in that it can eliminate certain debts. While this may free up more money, it’s important that you begin to save some of it until you can build up at least 3 to 6 months of expenses. Since emergencies can – and do – happen, by having an emergency fund you won’t have to rely on credit cards when money is unexpectedly needed.

Always Pay on Time

It’s important to know that more than 30% of your credit score is composed of your credit card payments. By always paying off your credit card on time, you’re not only being responsible but also helping to rebuild your damaged credit score. 

While the decision to file for bankruptcy is extremely important, so too is how you spend your money and build your credit score up afterward. 

Toronjo & Prosser Law Helps Those Who Are Dealing with Bankruptcy

Filing for bankruptcy is a big decision that can have a long-lasting impact on many different aspects of your life. It is a decision that should never be taken lightly, and one that should be your choice – not someone else’s – whenever possible. That’s why it’s so important to consult with a knowledgeable and experienced Dallas bankruptcy attorney who can help you to defend against your creditors’ petition. Additionally, if any creditors are currently harassing you, an attorney can also help. At Toronjo & Prosser, our qualified Texas Bankruptcy Attorneys can help you to navigate the process. To learn more or to schedule a free consultation contact us online or call us today!

About the Author
Derek Prosser understands that clients need help and need answers and that in order to properly address those concerns, clients need to deal with an attorney first and always, not just an assistant or paralegal.  By effectively counseling from the outset of a case, Toronjo & Prosser Law can anticipate and address potential problems before they arise, as opposed to when they’ve already surfaced (the “Counsel Later” approach), and, in the end, strive for a seamless representation.