Avoiding Bad Credit Cards and Consumer Scams

Most consumers who make the decision to file for Chapter 7 bankruptcy begin to think about ways to restore their credit. Indeed, it doesn’t take nearly as long as most Chicago residents think to begin rebuilding your credit profile after personal bankruptcy. But in order to be successful, you’ll need to do your research. Some credit cards are better than others, while some simply aren’t good at all. What do you need to know?
Learning the Signs of a Bad Credit Card Offer
According to a recent article in U.S. News & World Report, there are some telltale signs of a bad credit card. Regardless of whether you’re simply trying to increase your credit or rebuild after personal bankruptcy, you should know what not to look for in a new credit card. Here are some of the tips from U.S. News & World Report:
  • Don’t apply for a credit card that has a high annual percentage rate (APR). For consumers who are likely to carry a credit card balance from month to month, a high APR can mean that you’ll end up paying a lot of money in interest charges. While it’s better to avoid carrying a balance on your credit card, if you must carry a balance, finding a low APR is the best way to go. Credit cards with particularly high APRs can cost you a lot of money in the long run.
  • Don’t go with a credit card that comes with high fees and penalties. Credit card companies make a lot of their money by charging fees. Whether you’re asked to pay for balance transfers, cash withdrawals, payments online or by phone, or cash advances, fees could make your credit card a costly one. And if the fees seem exorbitant to you, it may be a clear sign that it’s not the best credit card option.
  • Don’t get a credit card with an extremely low credit limit. After you’ve filed for personal bankruptcy, it can be a bit difficult to immediately qualify for credit again. However, when you do begin qualifying for credit cards, don’t simply jump at the first offer. Take your time and make sure that the credit limit is fair. What will happen, for instance, if you need to use your credit card to pay a medical bill but only have a $500.00 credit limit?
  • Don’t fall for a card that doesn’t offer rewards. Nearly all credit cards come with some kind of bonus reward system, even for consumers who have filed for bankruptcy in the past and are trying to reestablish credit. And rewards programs can actually help you to save money. So if the card doesn’t have one, you might want to think twice.
Reestablishing Your Credit After Bankruptcy
After you’ve filed for Chapter 7 bankruptcy, it’s important to think about reestablishing your credit. Applying for an unsecured credit card and being approved is one of the first steps in this process. At the same time, however, make sure you read the fine print that accompanies the credit card offer. You don’t want to end up with a card that ends up costing you more money than it should at a time when you’re working hard to bounce back financially.
If you have questions about consumer bankruptcy and rebuilding your credit, you should contact an experienced Oak Park bankruptcy lawyer. At the Emerson Law firm, we have years of experience advocating for consumers in the Illinois area and can discuss your situation with you today.
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