In spite of the stigma and possible embarrassment of filing for bankruptcy, many folks have mitigating circumstances that make it often their only option to bypass repeated court proceedings against them. One thing that often worries these people is the obtaining of a Credit Card after Bankruptcy.
Credit card after bankruptcy however are indeed available but the catch is that normally you can expect to end up paying fairly high rates for the privilege and even additional annual fees.
One the reasons companies will offer a credit card after bankruptcy is the fact that a person cannot file for bankruptcy for at least seven years after the initial action has been discharged.
Thanks to this credit card companies have a legal recourse to use to collect any debts the credit card holder may end up with. Credit card debts are normally unsecured, however when someone cannot file bankruptcy, wage attachment can be used by the company to get back their money.
There are numerous dangers is obtaining a credit card after bankruptcy, beyond the usually higher interest rate, as charges for being late with a payment as well as annual fees can quickly put the person into a bad credit risk again.
Credit cards after bankruptcy are very often offered by companies supposedly as an option to help rebuild ones credit rating. People will very often pick these cards up in the hope of getting back on their feet. This is despite the fact that total annual fees can sometimes even equal that of their initial credit limit.
Things can go from bad to worse
To put things into perspective let us say for example that your credit card after bankruptcy annual fees are $290 and your initial credit limit was $300, if you were only one day late for a payment you can expect on average to end up paying $30 as a late fee.
But it gets worse; all this will push your liability up to $320 which in turn will give you an additional $30 fee because you were over your limit. Now you would have a $350 debt.
On top of all this since you have failed at this point in your obligations, your interest rate on your card can very quickly go to the maximum allowed by law.
You also would have no way out except to pay the balance on the card and some companies will make the demand that the balance be paid in full within 30 days or face collection action.
Wage garnishment, court proceedings and daily phone calls are just some of the things you can expect from here on in and it could well be years before you manage to clear up all your debts.
So there you have it, is it possible? Yes. But is it advisable? That is obviously going to depend on your ability to keep in check with payments and just how much you really need a credit card after bankruptcy.
Also see Mortgage Loan After Bankruptcy and or read this site to read more about all the Different Types Of Bankruptcy
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