The decision to get a credit card after bankruptcy is actually one you need to make right away. In order to do things in the future you want to start building up a new credit history as soon as possible because of how long it will take you to get a good rating. Your past financial problems won’t fall off your report for seven years, but with persistence and if you get on things right away, you can have a good rating in as little as two years.
It may seem that the reasonable thing to do would be to avoid using a card at all to avoid future financial problems, but sadly this will also ensure that you never make any moves forward. Your credit history is made up of two kinds of payments, revolving (cards) and installment (loans). If you don’t have a positive history in both of these areas it’s hard to get a good enough rating to be of much use. When you have a good rating you’ll get offered better interest rates, better insurance rates, and have an easier time finding approval for a loan, credit card, apartment rental, or home mortgage.
Getting a secured credit card will be the easiest and fastest way to start building your new financial history immediately. You’ll need to save up a few hundred dollars to get this kind of card. You can apply for one at most companies, including your bank. You’ll deposit the money into a savings account and this will be a collateral on the card, and set your credit limit.
In order to use this card in a positive way you need to not rely on this card for emergency money. Use the card lightly for groceries, gas, or another regular expense and pay it off in full each month. Using the card lightly means using less than 30% of your limit.
Make sure you have an emergency fund because unexpected expenses do come up, and fairly regularly. Most financial experts suggest having a $1,500 emergency savings easily accessible.
The decision to get a credit card after bankruptcy can be a scary one, but a necessary one in order to move forward.