Bankruptcy, for sure no one likes hearing that word especially when it concerns them, nevertheless for some of us it can be at times inevitable. Naturally when someone is filing for bankruptcy all kinds of worries come up as to how this will affect them long-term and credit cards after bankruptcy are just one of these worries.

However regardless to what some may think obtaining a credit card after bankruptcy isn’t impossible. There are companies willing to provide this although normally you can expect high interest rates and 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.

Knowing this, these credit card companies have a legal recourse in collecting on any unpaid debt resulting from the card’s use. While most debt charged on a credit card is considered unsecured, if the cardholder cannot file bankruptcy, the company can use wage attachment to gain repayment.

However as you will see it is one thing to obtain a credit card after bankruptcy but it is another to be able to use it safely. The danger is that with higher interest rates and extra fees on late payments you can quickly end up back in a bad credit situation.

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.

For some things quickly get worse and 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.

To make matters even worse the interest rate on this card could quickly add up on the maximum that is allowed by law since the obligations on the credit card after bankruptcy were not met.

There really is no way out either, with the exception of paying the balance on the credit card. Quite a lot of companies demand that the payment be made within 30 days and if that does not happen you would face collection action.

Daily phone calls, court proceedings, you name it, from here on in things can really get ugly and fixing the mess often takes several years.

So as you can see although it is possible, it comes with some possible hefty consequences! The bottom line is, it will depend on your situation and your ability to keep in check on your payments as to whether it would be for you or not.

Now go see Mortgage Loan After Bankruptcy and or read our blog to read more about the Different Types Of Bankruptcy