If I File Bankruptcy, Can I Keep My Credit Cards?

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Several years ago, my sister and her husband had to file for bankruptcy. I did not really know what all that meant back then, so I asked my mom. She told me that it was what happened when you can’t pay back the money you owe on credit cards or loans, and that they take away things that you have to pay for them. She also told me that it is very difficult to get a credit card after you file bankruptcy, but was it really true that you could not have any credit cards at all?

Now that I am older, I know a little bit more about the subject. When a person file for bankruptcy with existing credit cards that have an existing balance on them, you have to list it as a debt. After all, that’s what it is, because you owe money to the credit card companies. Because of this you cannot keep your credit cards.

However, if you have a credit card that does not have a current balance, you are allowed to keep it. Because you do not owe that company any money on the credit card, it does not have to be listed as a debt, therefore allowing you to retain your card for further use. But if the credit card company in which you are borrowing this money from find out that you have filed for bankruptcy, they may want to change the terms and conditions that the card comes with, like your credit limit on that card and the interest rate you are paying each month.

Still, the credit card company that gave you that card does have the right to cut off your credit line through that card if they ever find out that you filed for bankruptcy. It all depends on whether or not they are willing to keep you, but most credit card companies still want your business, even afterwards. Some credit card companies, however, will see you as irresponsible and take away the credit line you have through them, despite the fact that you do not have a current balance, just because of bankruptcy.

Getting new credit cards after bankruptcy is not really hard at all. One thing about bankrupt victims of debt is that they continue to get credit card offers, and perhaps even in more quantity than they were given to them before. Of course, the interest rates may very likely be higher than they normally are, and the offered limits might be lower, all because of your high risk of not paying off your debt.

To me, the whole point of getting out of debt by taking the path we call bankruptcy is to learn from our mistakes. We should not file bankruptcy with the goal in mind to just get more credit cards and get deep into debt again. The whole idea of it is to learn from our mistakes and trying not to repeat those mistakes.

Lowering Your Credit Card Interest Rates: All You Have To Do Is Ask

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The greatest thing about credit card interest rates is that you can call the company and ask them to lower your interest rate. It’s as simple as that. But there are a few conditions. Allowing just anyone to call up and lower their interest rates would be just ridiculous, and it would probably cost the companies quite a bit of money, considering all the irresponsible spenders out there. But this attribute can act as a reward for those who are disciplined in their use of credit cards. Here are a few of the conditions that must be met before your credit card company will lower your interest rates.

1. Have a good credit rating

Maintaining a good credit score will increase your chances of getting an interest rate reduction. Your credit score is what will determine the company’s trust in you, and it will increase or decrease your chances of getting a lower interest rate, depending on how good or bad it is. Having good credit says to the credit card companies that you are dependable, therefore because you are a good customer with good credit, you deserve to have your interest rate lowered.

2. Don’t have a big balance

Having a large balance on your credit card account will lessen your chances of changing your interest rates for the better because if you are deep in debt, credit card companies may believe that your potential to get further into debt is greater. The deeper into debt you get, the more likely you are to fail to pay your bills on time. This will in turn not only disqualify you for a decrease, but it will actually increase your interest rates.

3. Send in more than the minimum

When you pay on your credit card, there is a minimum monthly payment you must make, no matter what. If you have the means to pay a little extra on your credit card bills, do it. This will show that you are eager to pay off your debt, so you are less likely to go bankrupt, and more likely to make your payments on time.

4. Pay on time

Getting an interest rate decrease will be much more difficult if you have not paid your bills on time. In fact, one of the consequences of not paying on time is having your rates INCREASED. You must pay your monthly credit card payment each month, even if it is just the minimum, because the rewards are substantial, but so are the punishments.

Getting your credit card interest rates raised is can be a great advantage to you, but just like any other rewards you might get, you must obey the rules before you reap the benefits. You have to use your credit wisely. You must pay your bills on time and keep your balance at a level in which you can pay it off soon and without strain. These, among other things, will help to raise your credit score, allowing credit card companies a reason to give you a decrease on your interest rates.