Post-bankruptcy credit cards

When Florida residents complete the bankruptcy process, many are eager to take advantage of their financial fresh start and reestablish creditworthiness. While it is true that credit scores take a significant hit after a bankruptcy, making it hard to get credit or qualify for a loan, it isn’t impossible to get a credit card. Strategic use of the card or cards can also help people increase their credit score more quickly.

There are several reasons why credit card companies are willing to give cards to those with recent bankruptcies. The first is that the applicant has few or no debts that he or she needs to manage along with the credit card payments. The second is that the debtor will not qualify for another bankruptcy discharge for a period of time, making it easier for the card issuer to collect a debt. Finally, credit card issuers are at liberty to set card balances as they see fit, so a card with a limit of a few hundred dollars represents a minimal risk.

Financial experts recommend that individuals recovering from bankruptcy use their cards judiciously, but at least once a month, repaying the balance as soon as possible. Maintaining a low balance and making card payments on time for a year or two can do a lot to increase a person’s credit score. Over time, the card user can apply for credit limit increases in may eventually qualify for other types of credit, including auto loans and home mortgages.

Consumers who are struggling with their financial obligations may benefit from speaking with an experienced lawyer. After reviewing a client’s situation, the lawyer can determine what forms of debt relief might be the most appropriate.