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Can I Get a Credit Card After Bankruptcy?

Posted on in Bankruptcy

Can I Get a Credit Card After Bankruptcy?

If you are currently going through the bankruptcy process or have recently completed it, you are probably hearing and reading advice from many different sources. The advice you receive might be contradictory or inconsistent, with some parties advocating strategies that would not work in your situation or seem like they would get you back into debt, rather than help you stay out of it. One piece of advice you have undoubtedly received is to take steps to rebuild your credit. But how? After bankruptcy, your credit score is severely damaged and will remain that way for years, possibly up to a decade.

You can start by getting another credit card. This might seem impossible, but it is actually a fairly simple, straightforward solution. Secured credit cards, credit cards that are backed by a collateral cash amount that you give to the bank to open the card, are a great option for rebuilding a damaged credit score. But they are not the only option. For many individuals, it is possible to get another unsecured credit card to start rebuilding credit again.

Why Would I Get Another Unsecured Credit Card?

There are a few reasons why an unsecured credit card could be a good choice for you. These reasons include:

  • Many credit cards have bonus and perk programs, like a percentage of your money back on specific types of purchases or free nights in certain hotels;
  • Interest-free introductory periods; and
  • Unsecured credit cards are weighted higher when calculating your credit score, which means that having one can potentially help you rebuild credit faster than you would with only a secured credit card.

Unsecured credit cards have their drawbacks, too. These drawbacks include yearly fees and high interest rates for individuals with poor credit. By their very nature, they can be difficult or even dangerous for individuals who have poor impulse control or an inconsistent income. But if you have completed the bankruptcy process, you have received credit counseling and should be equipped to make productive decisions with your credit and debt in the future. You also cannot declare bankruptcy again for the next 10 years, so it is imperative that you use any new credit cards you open wisely. Ultimately, only you know yourself and your habits well enough to know if you should get an unsecured credit card after completing the bankruptcy process. You certainly should do all that you can to rebuild your credit, but if you do not trust yourself with an unsecured card, consider a secured credit card or the alternatives to using a credit card to build your credit score.

Work with a Chicago Bankruptcy Attorney

Bankruptcy can have many legal caveats. For guidance navigating this process, work with one of the experienced bankruptcy attorneys on our team at Newland & Newland, LLP. We are located in Suite 3700 of the prestigious 180 N. LaSalle Street building in Chicago. Schedule your free legal consultation with us today.

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