Once you go through bankruptcy, whether chapter 7 or chapter 13, you might realize that getting a credit card is extremely difficult. However, instead of being disheartened, get to know the alternatives, say lawyers of Dallas based law firm (https://recoverylawgroup.com/bankruptcy/). One of the best alternatives is to get a secured credit card, department store cards, or get credit cards with a consignor. Once you behave responsibly with these, the chances of getting a regular credit card improve drastically. However, before applying for one, it is important to think whether you need one or not? This is because staying away from credit cards can save you from financial problems.
Options for obtaining credit card after bankruptcy
There are several alternatives if you find it difficult to get a regular credit card from the bank. Using any of these options responsibly for several months or years can improve your credit history which can go a long way to help you get a regular credit card from major banks.
- Secured credit cards – People with poor credit history can get a secured credit card. In this case, you deposit an amount with a bank or credit union. With this, a credit card is issued with a credit limit for a percentage of the deposited amount. Unfortunately, you need to pay a high-interest rate along with other fees to use it. Additionally, ensure that the card issuer reports the account to credit reporting agencies.
- Get consignor – In this case, the consignor promises to pay the amount if the primary account holder defaults. Since there is a cosigner involved, you are likely to get the credit card; however, ensure that the credit card issuer reports both your and the consignor’s name to the credit reporting agency. In case your name is not reported, you will find it difficult to build credit.
- A credit card from a department store or gas company –There is a better possibility of you getting a credit card from department stores or gasoline companies than from big credit card owners. This is probably because the accounts are opened with an extremely low credit limit. Clearing the balance in full every month helps build a positive credit history. Unfortunately, the interest rate is remarkably high on such cards.
What to do when you are ready for an unsecured credit card?
After you have spent some time building good credit through either of the above-mentioned methods, you can apply for a regular credit card from a major bank. For this, you can use these tips:
- Apply for a credit card when you get a job and have lived at one address for more than a year. Additionally, there should not be many credit inquiries on your credit report.
- Apply for a joint credit if your spouse has a better credit report. Alternatively, you can also indicate that you are married in the application.
- Let the creditors know if the past credit problems were due to unfortunate circumstances (being laid off from the job, unexpected illness-causing huge medical bills, etc.)
- Choose your bank or telephone company while applying for credit cards.