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Qualify for credit card
Even before bankruptcy drops your previous credit
report, you could qualify for credit with good rates and terms.
In fact, newly discharged debtors are frequently solicited for enrollment
onto new cards. However, before you plunge back into the credit
world, consider the extent to which easy credit lead to a bankruptcy
filing before you sign up for new cards. You must ensure that a
responsible credit habit is maintained for payment of bills, and
only a small portion of the available credit should be used. Most
credit card companies will allow you to keep their credit card for
use even after you have filed bankruptcy. This is on the condition
that you agree to reaffirm the balance on the card and enter into
a new agreement, which is signed after the bankruptcy filing. Most
creditors want your future business, and hence will be willing for
you to use their cards. A recent bankrupt may give you trouble to
qualify for a regular, unsecured credit card. It may even turn out
to be more expensive than before, and available with lower limits.
Financially, secured credit cards offer you a better deal than any
of the unsecured cards you’re likely to run into after your bankruptcy.
So it is best to opt for a secured card, which sets a limit for
you. This credit limit in a secured credit card is equal to an amount
you have to deposit at the card-issuing bank. A secured credit card
requires up to $500 to be deposited. This amount may seem miniscule
as compared to exorbitant credit limits you may have enjoyed before
bankruptcy. ”
Reestablishing credit. If your credit history is damaged,
you may only be able to qualify for a secured credit card. Using
this secured card appropriately and within the set parameters will
help rebuild your credit and qualify you for an unsecured card.
If you have had to file for bankruptcy, however, you may not qualify
until it has been discharged.
Preset limit cannot be exceeded. If poor spending
habits were part of the cause for bad credit, then a secured credit
card will help keep spending in check.
Useful for transactions that require a credit card.
Hotels and car rentals require the use of a credit card. If you
don’t qualify for an unsecured card but you do for a secured
card, then you are still able to make the transaction.
What should I look for or avoid when shopping for
a secured credit card?
Fees. This is the area you will really want to research
when shopping for a secured credit card. Some cards will come with
fees that run into the hundreds of dollars, eating away much of
the credit you secured with the savings account. Professor Plummer
says a card with no fee is the best, but a small one-time fee can
be okay. Annual fees for attractive secured cards typically range
from $20-$35. Be sure to watch out for hidden fees such as “registration
charges” and “setup fees.”
Interest Rate. Just because you have no or poor credit
doesn’t mean you have to settle for the highest interest rate.
Interest rates for attractive secured cards should not exceed 19%.
Shop around and get the most competitive rate available. Read the
fine print. Linda Tucker, Director of Education for Consumer Credit
Counseling Service for Arkansas and Memphis, TN, stresses the importance
of reading the fine print. Doing so will let you know your exact
obligations to the issuing company: for example, the grace period,
what happens if you don’t make a full payment, and what fees
are attached if you don’t make the full payment. Understanding
these details will help make sure you are not further damaging your
credit.
Fraudulent Offers. As with unsecured cards you need
to watch out for fraudulent offers.The Federal Trade Commission
gives the following advice to protect yourself from credit card
fraud:Offers of easy credit. No one can guarantee to get you credit.
Before deciding whether to give you a credit card, legitimate credit
providers examine your credit report.Credit cards offered by "credit
repair" companies or "credit clinics." These businesses
also may offer to clean up your credit history for a fee. However,
you can correct genuine mistakes or outdated information yourself
by contacting credit bureaus directly. Remember that only time and
good credit habits will restore your credit worthiness.
When will I qualify for an unsecured credit card?
It can take several months to see an improvement in
your credit history. Bankrate says it’s a good indicator when
you start receiving flyers in the mail for unsecured cards that
your credit is improving. However, it’s a good idea to continue
taking things slowly. Using a secured card will help you learn healthy
habits so that when you do get an unsecured credit card you remain
in control of your spending and credit.
The
next step should be a credit card debt consolidation
Soon you are in big debt and as things you want to
buy come up in or you want to plan for the future, you can not because
of your overspending in the past. Suddenly you start to realize
that you have several credit card bills or other bills you can never
pay off like power, phone bills etc. Now is the time to consider
debt consolidation. This is a really good way to take all those
bills and turn them into one payment. Normally this payment is lower
than if you paid all of them separately like you're trying to do
now. When you get out of debt and start saving money, you are more
liberated to plan for things now and for your future.
Learning how to consolidate credit card debt is one
of the best things cardholders can do. Consolidation is perfect
for those who are looking to better their credit for the future.
There are many advantages for cardholders who consolidate credit
card debt. If you are thinking about consolidation, then there are
a few things you should consider before doing so. Use these tips
as a guide while you consolidate your debt.
Why
Consolidate?
There are several great reasons to consolidate credit
card debt. One of the best reasons is to get better rates. If you
can get a better rate on a consolidation than you currently have,
then there is no reason not to consolidate. Anytime you can consolidate
credit card debt and save yourself money, you should. Locate all
of your interest rates from each card and write them on a list.
Then note the new rate you would be given. If the new rate is lower
than the average of the old rate, then to consolidate credit card
debt would be profitable for you. If there are cards that have a
lower rate, then you don’t have to include them in your consolidation.
Another reason people love to consolidate credit card debt is to
make their lives simple. By paying one bill, they can cut out a
lot of stress and bill paying time. You should probably not consolidate
credit card debt for this reason alone however. You don’t want
to pay more in the long run just to cut out a few pieces of mail
monthly. Consolidation also gives those in a credit card mess a
chance to get out of it. By consolidating, they may be making lower
monthly payments than they would be if they didn’t consolidate
credit card debt. By closing out the other accounts, their credit
may also be improved.
Who To Turn To?
When you want to consolidate credit card debt, you
should turn to professionals. There are many great credit card companies
and banks that would love to help you with your request. Make sure
you do your research so that when you consolidate credit card debt,
you are certain you are making a decision that is profitable to
you. Make sure there are no hidden fees that come with different
consolidation plans. Doing your research can help you save money
for the future.
Making The Choice
If you want to consolidate credit card debt, you should
first look at all of your debt in detail. Once you know what you
have, it will be easier to contact professionals to help you with
your consolidation. Don’t be afraid to tell them you are shopping
for the best deal. You should do yourself the honor of getting the
best deal out there to making your consolidation as worthwhile as
possible.
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