Is a credit card a good idea to build credit after bankruptcy?
Written By: admin on January 10, 2010
One Comment
I have an unsecured 0 limit card that I got to re-establish my credit after my discharge. Problem is these cards are full of fees and monthly dues but they do report to all 3 bureaus which is excellent. Am I going to be on the same situation no matter who gives me a credit card as far as fees and high interests? I wonder if a secured credit card would help me better? Any suggestions?
Related Financial Planning Posts
Tags: cards, Credit Cards, secured credit cardTags: cards, secured credit card
Going with such cards is a necessary evil, I’m worried. Oftentimes, these types of cards are the only ones who will extend credit to those who have recently filed for bankruptcy. You can always check bankrate.com to shop around for cards who might have an annual fee (instead of monthly!) and lower interest rates.
Secured credit cards can be just as taxing on your money, so shop around. Make sure you pay on time 100% of the time – that will help your scores bounce back. Do this for at least 24 months.
Also, watch your balances. Don’t borrow anywhere near your total available limit. Only borrow 30% or less than your total line of credit.
I would certainly start off with a credit card first. Try to avoid a car loan – wait at least until you have your 24 months of a excellent track record behind you. You will see a better interest rate that way.