By: Jeena Cho

Can I get credit after bankruptcy? The simple answer is “Yes.” Most people will get offers for credit cards and cars after bankruptcy. Why? Because you can’t refile for 8 years (in case of Chapter 7 bankruptcy) and the creditors know they’ve got you. You can’t run and hide again. Most of these “deals” you get after bankruptcy are not deals at all. Here’s an example of one I’ve come across recently.

Our FDIC insured bank, has a Visa secured credit card that features:
- NO CREDIT CHECK OR INQUIRY
- Reports to all 3 major credit bureaus
- No annual fee
- 0% APR for 6 months on purchases
- Low $200 minimum deposit

It is perfect for people right out of bankruptcy.

Sounds great, right? No credit check? 0% interest rate? No annual fee? You’re thinking, where do I sign? NOT SO FAST! You must read the fine print before signing any document. So, being a smart consumer, you read the Cardholder Agreement. It’s 11 pages long, with very dense font. It doesn’t take long though to figure out this is not a good deal at all! In the first 3 pages, I find these fees.

• Set-up fee: $79
• Minimum monthly fee: $10 or 2% of total balance, whichever is greater
• Credit limit increase or decrease: $25 per occurrence
• No interest on deposit account

For the privilege of having a credit card, you will pay $199 in the first year. This is assuming you don’t carry a balance at all. Not to mention the fact that you have to front the money in exchange for the credit limit - interest free.

How about taking the money you would have given to the credit card company, and parking it in a savings account? Assuming $500 @ 1.5% interest, you just earned $7.55 in the first year. Instead of giving $199 to the credit card company, you’ve earned $7.55. Total amount you saved = $206.55. Of course, this amount doesn’t take into consideration fees for interest, overdraft, over limit, etc.

We live in a credit driven society. We don’t value savings as much as we should. Instead, we focus on credit, which is just borrowing from the future. How about saving for the future instead of borrowing from it? Don’t let these creditors take advantage of you and lead you into life of debt again. If you can’t pay cash for it, if you don’t have the money sitting in your bank account - you can’t afford it. So, go on, take that money and save it.