It is no secret that filing for bankruptcy will have a negative impact on your credit score. Some reports say your credit score can be dinged by as much as 220 points for the seven years it is required to stay on your credit report. But the many benefits of filing for a Chapter 7 or Chapter 13 bankruptcy can far out weight the negative impact on your credit score, and many banks are now starting to realize this.
Denver residents may be interested to know that filing for bankruptcy does not mean you should stop using credit. Generally speaking, the better your credit score the better interest rates and rewards a credit card company is willing to offer you, but there is hope for consumers who want to rebuild their credit after bankruptcy.
The trick is to find a lender willing to qualify you for a credit card account. Because of the economic crisis in 2008 and the resulting stinginess of creditors many credit card companies have started designing credit card accounts specifically for consumers who have filed for bankruptcy. Here's a brief look at some of these credit products currently being offered by a few lenders.
The AccountNow Prepaid Visa Card is a prepaid credit card which actually reports your spending history to the credit monitoring bureau. It can be prepaid up to $5,000 per day and allows you to write online checks all at no additional charge.
The Orchard Bank Classic MasterCard allows you to select your own monthly due date and sends you text and email messages to remind you of the approaching due date. It offers a number of other features including fraud protection with zero-liability for you should your card get stolen.
The CreditOne Platinum Visa - yes it is a platinum card so if you are worried about appearances there is no need to worry with this card. It lets you keep your platinum credit status while you work on rebuilding your credit score. It costs $75 per year, however it reports all your monthly expenditures to the major credit monitoring bureaus, as well as offers travel accident insurance and automatic credit increases over time.
If you are considering filing for personal bankruptcy protection, consult with a bankruptcy attorney who can help you determine your qualifications and what type of bankruptcy might be best for your individual circumstances.
Source: Business Insider, "The Best Credit Cards To Apply For Post-Bankruptcy," Ben DeMeter, April 17, 2012