Credit Cards Can Be Essential Tools in Getting Your Credit Back After a Bankruptcy – But Only if They Are Used Correctly

Credit Cards Can Be Essential Tools in Getting Your Credit Back After a Bankruptcy – But Only if They Are Used Correctly

The most recent statistics show that American consumers are managing their debt better than they have at any point since the Great Recession of 2008. Delinquencies are falling, the number of persons pursued by debt collectors is decreasing, and bankruptcy filings are at their lowest level in seven years.

The economy is still struggling, and many Americans are either unemployed or working part-time. The fact that consumer debt has increased in recent years by 29 percent since the end of the Great Recession suggests that this may be a contributing cause. It might only be a matter of time before you have to declare bankruptcy if you are heavily indebted.

One of the main causes of unmanageable debt for many American households is credit card debt. Fortunately, a Chapter 7 bankruptcy can be used to get rid of it, and a Chapter 13 bankruptcy can decrease it to a reasonable payment.

Improving your credit after a bankruptcy

If you want to make the most of this fresh start and move forward in your life rather than backwards straight into deep debt, you must be very careful of how you manage your money and restore your credit. Bankruptcy can give your financial future a fresh start.

Here are some crucial pointers to help you comprehend the proper and improper use of your credit cards following bankruptcy.

The right way to use credit cards after a bankruptcy

After filing for bankruptcy, following these three straightforward guidelines can help you recover your credit as soon as possible. As quickly as possible once your bankruptcy is approved, apply for a credit card. Although you might not immediately be eligible to create a standard account, you can obtain a secured credit card that will allow you to borrow money in exchange for a deposit made to the credit card provider.

Spend no more than 30% of your credit limit while making monthly purchases using your card. Each month, settle your account in whole and on schedule. If you follow this three-step plan, your credit will improve faster than you might expect.

The wrong way to use credit cards after a bankruptcy

Avoid falling into the same traps that could have led you to bankruptcy the first time around. Don’t apply for multiple credit cards; just one will suffice for credit repair. Never use your credit card for more than you can afford to pay back at the end of the month, not even to receive rewards. Avoid using your card to obtain high-interest cash advances.

Looking for more information on life after bankruptcy?

Get in touch with Law Offices of Terrence Fantauzzi. To assist you in deciding if bankruptcy is the best option for you, our knowledgeable bankruptcy attorneys can provide you with all the information you need about the bankruptcy process and the recovery phase. Call us now at (909) 552-1238 to get started.

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