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Should you apply for a credit card following bankruptcy?

If you have filed for bankruptcy in Tennessee or anywhere in the nation, the chances are that you have been left with a damaged credit score. However, there are ways that you can rebuild your credit following a bankruptcy. Some people may decide to apply for a credit card with a low credit limit, and are careful to pay off their entire balance at the end of every period. However, experts warn people about the dangers of subprime credit cards and the companies that approve them.

Subprime credit cards allow people with low credit scores the chance to have credit and use it wisely. Yet in order to extend credit to people who have filed for bankruptcy, these credit card companies often charge high interest rates and fees, such as maintenance fees, annual fees, authorized user fees and processing fees. Statistics indicated that a higher number of people with subprime credit scores are applying for these credit cards. In 2015, subprime crediting companies represented more than 31 percent of all credit agencies, increased from 23 percent from 2014.

In some cases, subprime credit agreements may be difficult to understand and you may not realize what you are getting into when you apply for these cards. Subprime contracts may be up to 70 percent longer than regular credit cards, extending the amount of fees and interest that you must pay off in order to clear your account.

This information is intended to educate and should not be taken as legal advice.

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