The widely used credit card, Capitol One, has made the phrase, “What’s in Your Wallet?” one of the most famous marketing taglines in American business history. For an up-and-coming consumer financial services firm, Capitol One’s question gently asked consumers to reexamine their financial life and focus on the issue of whether they were getting the deal they deserved from their credit card company.
For individuals and families preparing for bankruptcy, this question is important, too. In the months after bankruptcy, your access to credit will likely be limited. High-interest, low-balance credit cards may be your only place to find financing. Prudent people may tell you that a credit card is the last thing you need. In fact, for many families, high-interest debt is precisely why they’re in the fix that they’re in.
Ironic as it might seem, a credit card may be just what the financial doctor ordered. In the immediate aftermath of your bankruptcy, your credit score will tell one story to a lending institution: “Don’t trust this person with a loan!” By signing up for a credit card and making timely, full payments, you’ll start to change that story. Creditors will see your regular payments and responsible use of credit.
Will you pay for this strategy with higher interest rates? You bet. And if you can’t control your spending, this strategy can be extremely dangerous. On the other hand, if you really have turned a corner in your personal, business, and financial life, this approach may ensure that you get the credit you need to rebuild your credit score.
Ready to talk about other strategies to improve your financial life after bankruptcy? Talk to the professionals at the law firm of Fears Nachawati today. With years of experience, we know how to give you the advice you need.