Since the global economy crisis in 2008, many Americans have been fighting seriously with their debt issues. For those who can’t solve their financial problems, they have to declare bankruptcy or foreclosure. After declaring bankruptcy, what’s next? Is it the end of the day?

Definitely not! After bankruptcy or foreclosure, it is indeed important to stay positive. They must make a fresh start and put in hard effort to rebuild their credit history. In order to get back to good credit, they are advised to open new credit accounts.

One of the ways is to apply for a credit card. Although the process of getting approval is quite challenging, there are many lenders in the market who are eager to assist this group of people.

Here are some practical tips for your kind reference:

  • Do you know that there are many credit card companies in United States aim their targets at those people who are recent bankruptcies? The lenders know how important a credit rating is to a person. Since declaring bankruptcy destroys a person’s credit score, it is a must for him or her to rebuild as soon as possible. Hence, utilizing a credit card for this purpose is the easiest way.
  • If you don’t have any contact of the lenders, you are advised to approach your bank or credit union, especially the one you have good track record with. You are encouraged to explain your situation to your lender honestly and request for a reasonable interest rate if possible. In general, for people who have undergone bankruptcy or foreclosure, the interest rates on their credit cards are usually high, i.e. 30% per annum.

    Some even charge annual fee, monthly maintenance fee, extra late charges, etc. to the cardholders. What you can do is to appeal for the lowest rate. If it is not allowed, you still need to accept the terms as you need the credit card to repair your credit score. Anyway, do thorough comparisons first before making your final selection.

  • If you really need to avoid the high interest rate, you are recommended to get a co-signer. Get the assistance from someone who is willing to be a joint applicant on your credit card. The person can be your spouse, your close relative or friend. The most important thing is to ensure that the joint applicant must have good credit. This will definitely help you to get a credit card with a decent rate.
  • You need to accept the fact that getting approval for an unsecured credit card is a hard task, especially if you fail to get a co-signer. Hence, you are advised to get a secured one first. Save some money and deposit it to your credit card account. The amount of your deposit determines your credit limit. Be patient and disciplined. Make sure you make your payment regularly and promptly. Once you have built your credit, you will be able to switch to unsecured credit card in 2 years time.

You need to be well prepared that at the initial stage after bankruptcy, you won’t be able to get a credit card with great interest rate or high credit limit. But at least you start your first step by getting something. Even if it is a secured credit card, obtain it first and start building your credit gradually. This is the life after bankruptcy and foreclosure. Spend some time on it and finally, you will regain your financial strength soon.