Bankruptcy might ravage your personal finances, but that doesn’t mean you still can’t apply for new credit cards. In fact, issuers are likely to send you a slew of offers after your case closes. Before you take them up on their offers, however, you’ll want to put yourself on a path to financial stability. Here’s what you need to know about applying for credit cards after bankruptcy.

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Consider a secured card

Rather than going for traditional credit cards, many consumers recovering from bankruptcy opt for secured cards as a way to improve their credit scores without the risk of getting in over their heads. A secured card requires a cash collateral deposit that becomes the credit line for that account. Cardholders can spend up to the limit, but if they fail to pay off the balance at the end of the month, the deposit is used to cover the bill. Make sure the issuer reports the card to all three reporting agencies so you can build your credit score.

Unsecured credit cards

After a bankruptcy, you still can apply for conventional credit cards that are unsecured. But with these cards, it’s important to check upfront fees. Similar to a secured card, you’ll want the credit agencies to be updated.

Buy only what you can afford

Most consumers can be approved for credit cards after bankruptcy, however, the real challenge is learning to live within your means. Experts advise that you set and stick to a reasonable monthly budget. That means making sacrifices, but it also means smart spending.

Consumers should use their new plastic to rebuild their credit scores, not to finance purchases they can’t afford. When you apply for a credit card after a bankruptcy, make a commitment to use your new card to charge and pay off regular expenses such as utilities and groceries.

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