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Can credit cards help rebuild your credit post-bankruptcy?

Whether you have recently filed for bankruptcy or you have already had your bankruptcy discharged, you may be feeling the effects of bankruptcy on your credit score. There are methods you can take to rebuild your credit and get a fresh financial start. If credit card debt was a contributing factor to your initial need to file for bankruptcy, you are not alone. Yet, even after your bankruptcy is discharged, you may get invitations from credit card companies as a way to rebuild your credit and get back on your feet. It is important to stay on the alert for subprime credit card companies, as they can cause you to become stuck in debt once again.

Subprime credit card companies offer credit to people who have credit scores below 600, then charge inflated interest rates and fees as a way to protect themselves against a higher default rate. You may think you are improving your credit score, while you may be getting sucked into an endless cycle of maintenance fees, interest, annual fees and processing fees. Secured credit card companies, on the other hand, rely on interest to provide their revenue.

This does not mean that all credit card companies will devastate your ability to rebuild your credit. Some companies allow users to prepay on the card, reducing the amount of fees and interest. It is critical to say on top of your credit card balance and not charge more than you can pay off every month.

This information is intended to educate and should not be taken as legal advice.

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