In these difficult economic times, many people have been unable to cope financially and have gone through all the emotional pain and heartache that is bankruptcy. Having come out the other side they are thinking about how to build their credit rating, and also whether or not credit cards after bankruptcy are a good idea.
Credit cards can be one of the foremost reasons for people getting into financial difficulty. The temptation of spending and not paying off the balance every month is very appealing.
At first the minimum payments are manageable, but as more debt is accrued and economic times start to take their effect, even this can become too much. Minimum payments are missed and one's credit score deteriorates.
Many people just stay away from credit cards after bankruptcy, which on the face of it seems a very good idea, but is it really?
There is an irony here. Credit cards are one of the easiest ways to destroy your credit rating. They are also one of the best ways to repair it.
The way to restore your credit rating is not to avoid credit. It is, in fact, to show you can repay credit. By taking on a small amount of debt, maintaining the payments and paying it off is the best way to restore your credit score.
So, can you get a credit card after bankruptcy? The answer is yes, if you hunt around. You may be able to get an unsecured card, but the problem there is that you will be paying a much higher interest rate due to your credit history.
Also, beware of cowboy operators who will give you a card at extortionate rates, but not register with the credit bureau. If the card is not registered you will not benefit at all!
The best thing to do is to take out a secured credit card. This is where you deposit a sum of money, say $500, and the company will give you credit up to that $500. The card is ""secure"" as you are using funds that you have deposited with them.
You may wonder why bother to do this and not just use the $500 as cash?
The point is, using cash does not improve your credit score, nor does simply staying away from credit. This way, you are using credit which is guaranteed to be repaid (you deposited the money remember?), and your credit rating will start to improve.
Remember, repaying credit improves your credit score - living with cash only is risk free, but will not improve your rating.
For further free advice and information on credit cards after bankruptcy have a look at http://www.howtoclaimbankruptcy.net which has advice on many aspects of personal bankruptcy including the process itself and the main chapters and their consquences.
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