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Can I Get a Credit Card Past Bankruptcy?

Posted on 25. Feb, 2010 by emilythomas in Moneytips

While a bankruptcy hanging over your head can seem like a life sentence, the truth is that you can get past a bankruptcy given enough time and proper financial behaviour.  The fact that you qualified for a bankruptcy indicates that you convinced a court that you needed help resolving debt you had.  Not everybody goes into bankruptcy because of credit card debt.  Bankruptcy can occur due to bad investments, business problems, and medical crises.    Even the Donald has declared bankruptcy and look how far he has made it since then.  He should have told his financial advisors “You’re fired.”

While most things you do financially stay on your credit report for seven years, anything related to a bankruptcy will usually stay on your credit report for ten years.  Does that mean that a credit card is impossible after you have had a bankruptcy?  No.  As long as you can demonstrate responsible borrowing after a bankruptcy, your credit score will improve over time.  You may not get the best credit card deal, but a credit card none the less.

Will your credit score ever look as good as it did before a bankruptcy?  Probably not, at least not for the next ten years.  Therefore, it may be difficult for you to qualify when you fill out credit card applications.  Possibly worse, is if you do qualify for a credit card with a poor credit score, you are probably not getting a good deal from the credit card company.

They have to hedge their risks by charging more to you in order to let you use their credit card.  If you are only receiving credit card offers with terrible APRs, consider other options for credit card buying:

• Visa checking cards.  These cards are received like credit cards by merchants but in fact act like debit cards against your account.
• Cash vouchers or gift cards.
• Debit cards.
• Secured credit cards.  These are credit cards that you have to deposit a set amount of in order for the bank to authorize charges using your secured credit card.

Instead of settling for a card with an atrocious APR, consider using one of the above ways to buy things online or to secure a hotel reservation or car rental.  In case you did run into bankruptcy because of poor credit card handling, you probably should not rush into getting a new credit card until you are assured that you have a good handle on your credit card debt.

The way to improve your overall credit score is to make your payments on time and not to maintain a high debt to earnings ratio.

This article was contributed by Sandra Waldorf who writes about living frugally.

Tags: bankruptcy, best credit card deals, Credit Cards, credit cards uk, MBNA credit cards, Moneytips