Are you doomed to life without a credit card after bankruptcy?

One of the features of bankruptcy that tends to paralyze consumers into nonaction is the loss of their credit cards — even though they may be mostly or totally maxed out.

Fortunately, bankruptcy doesn’t mean giving up all credit forever. Consider the following tips — but talk to your attorney before you act to get advice specific to your situation:

  1. There are companies that specialize in cards that “rebuild” your credit. However, the interest rates and fees are high, so only open one as a last resort. Only keep it until you get better offers — then either negotiate for a better interest rate or dump the card for one that lets you transfer the balance and has a lower interest fee as soon as possible.
  2. If the only bank card you have now is a “debit” card, ask for a “credit/debit” card instead. While it still functions like a debit card and relies on what is actually in your account when you use it, the “Visa” or “Mastercard” logo on the card will let you do things like make reservations or pay bills online. That can ease the frustration of not having an actual credit card.
  3. You can get a secured card. Secured cards require you to put down an amount that’s about equal to whatever limit the card has. In other words, if you put down $200, you can get a $200 card (although they may allow a lower deposit). The bank then has the reassurance that they already have their money if you do default.
  4. You can reaffirm on a credit card you already have. Be careful, though — this removes that debt from all bankruptcy protections. However, if you have a small balance on a card, it might be worth doing. One note of caution — if you pay that card off shortly after bankruptcy, the company will probably cancel it. However, if you keep a small amount of debt on it, they usually won’t. Regular payments will then help raise your credit score faster.
  5. Ask a close relative or friend to list you as an authorized user on one of his or her credit cards if you feel like he or she trusts you not to abuse the privilege. That can really help raise your credit score and qualify you for regular card of your own faster.