Credit Card after Chapter 7
I just recently filed Chapter 7 and was told to start rebuilding my credit by getting one credit card and charging/paying off $100.00. Questions. Is it better to get a secured verses an unsecured card? Also are their any credit cards that convert from unsecured to secured? Finally,any credit card recommendations?
Hubby and I went through bankruptcy about 10 years ago (chapter 7).
My advice is DON’T DO IT AT ALL! It’s way too easy to get sucked into the same cycle all over again. Your credit will repair itself. If you think you absolutely have to have some kind of charge card – do a secured only.
You may want to account your income and your expenses first (just to make sure you can afford to do something like that). I don’t know that it’s necessarily better to get a secured vs. an unsecured card–it really boils down to things like fees and interest rates. Your second question, I think you meant to say “from secured to unsecured,” and I believe that there are (Bank of America may be one).
After I filed, I went without credit cards for about two years. I found that to be a good thing because I needed to get back to spending real money, whereas I had been treating credit cards like “hypothetical future money.” I had to adjust my lifestyle and re-evaluate my priorities because I was spending too much on relatively unimportant stuff. Now I use credit more judiciously, on stuff I need, can afford and would have bought with cash anyway, and pay my balance in full every time.
As far as recommendations, please read the below very carefully.
The following are cards to AVOID – DO NOT TOUCH THEM with a 39 1/2 foot pole:
- Imagine Gold – issued by First Bank of Delaware
- Continental Finance – issued by First Bank of Delaware
- First Premier Bank
- Centennial Gold – issued by First Premier Bank
- Salute Visa – issued by Urban Trust Bank
- Total Visa – issued by Plains Commerce Bank
- Credit One Bank
- Aspire Visa
- Access Visa
- Applied Card Bank/Cross Country Bank
These are cards that charge fees out the wazoo and have low limits, meaning you never have much available credit to use.
As far as positive recommendations, you may want to check out the forums at ficoforums.myfico.com and click on Credit Cards.
I wish you all the best where rebuilding your credit is concerned–I field Ch7 myself four years ago.