Rebuilding your credit rating is an important first step after a bankruptcy discharge. One of the ways post-bankruptcy debtors rebuild their credit is by taking out a credit card; but how do you know if the credit card is worth it or just another trap door leading to more debt? Below are few tips on how to choose the right credit card while rebuilding your credit after bankruptcy;
- Is the credit card issued by a major bank? You want a credit card that you can use just about anywhere and that will report your payments to one or more of the credit bureaus.
- Does the credit card have a teaser rate or is the initial interest rate there to stay? One of the most common ploys of high interest rate credit cards is to get the debtor with a low teaser interest rate that skyrockets within a few months. Before you agree to taking on a credit card, read the fine print and find out what the true interest rate is.
- Does the credit card have a grace period that allows you time (at least 28 days) to pay the balance without accruing interest? For post-bankruptcy debtors, having a grace period can help them avoid the slow slide into debt that landed them in bankruptcy in the first place. Smart post-bankruptcy debtors make sure that their credit card has a grace period with fair terms.
- Does the credit card have an annual fee or other sign-up fees? Don't allow the fact that you filed bankruptcy stop you from demanding a credit card with fair terms and no annual fees or sign-up fees. There are credit cards out there that have no such fees that are willing to work with those just exiting bankruptcy.