To see why Credit Cards are offered to recently discharged bankrupts, you need to understand how this group are regarded by the credit industry. In a competitive marketplace you will find many companies fighting for new customers and the credit card industry is no different. Because people with bad credit records including Bankruptcy constitute a large sector of the market, suitable products have been developed for members of this group.
Although your credit report will disclose the Bankruptcy for a period of ten years, its negative effect on your ability to obtain credit reduces from day one. In fact a discharged bankrupt is regarded by some companies as a better risk than he was before the Bankruptcy since he will now have little or no outstanding indebtedness. Naturally this is on the assumption that such a person is now using credit in a responsible manner by making regular repayments and not borrowing right up to their limit.
Even with a choice of offers, any credit card you obtain following a discharge from Bankruptcy will be on far worse terms than you enjoyed before. Most cards will require payment of an annual charge as well as an initial setup fee. The first card you are likely to be offered will be a secured card where you pay a deposit which is held by the card company as security that can be used to repay the loan in the event of a default. The credit limit will usually equal your deposit. After a few months and provided you are in good standing, you should be offered a transfer to an unsecured credit card with a higher credit limit.
Following a Bankruptcy there will be no difficulty in obtaining a credit card even if it will be expensive. The possession of a card will help in rebuilding your credit score. But to end on a note of caution, if easy credit from too many Credit Cards contributed to your Bankruptcy, take a step back before going that way again.
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