Keeping a credit card open in 13

[eap82]

Hi,

I finally went ahead and filed my chapter 13 in December. Just had my 341 meeting so very early in the process. This forum was a huge help in preparing me and managing my anxiety so thank you!

The question I have is that I have one paid off credit card that has survived the filing. I’d like to charge a small amount, like groceries and then pay it right off in order to maintain my positive payment status and keep the card open. Does anyone have any experience with this and having any issue? The last thing I want to do is jeopardize my plan, I really need to make this 13 work.

Thanks!

[shipo]

What does your plan state? For most of us, it is verboten to have any credit at all, and for others, any credit over $500 without expressed written consent of the Trustee in charge of your case. Then there's this; I believe I've heard somewhere in these forums if you have a credit card not listed in your filing, the instant said card issuer finds out you've filed, and they will, they'll close the card.

I'm sure justbroke will chime in here and correct me if I'm wrong and expand upon the things I've gotten correct.

[eap82]

What does your plan state? For most of us, it is verboten to have any credit at all, and for others, any credit over $500 without expressed written consent of the Trustee in charge of your case. Then there's this; I believe I've heard somewhere in these forums if you have a credit card not listed in your filing, the instant said card issuer finds out you've filed, and they will, they'll close the card.

I'm sure justbroke will chime in here and correct me if I'm wrong and expand upon the things I've gotten correct.

Thanks for you quick response. Nothing so far has has had any wording about not having any credit, it’s not addressed at all. I have had other cards that were paid off closed once I filed but not this one, still open.

[Manup]

@eap82 I had a card that had a zero balance and was not listed in the ch. 13. Didn't think too much about it until I tried to purchase something on Ebay for a few dollars where the card was saved, and it was declined. Come to find out they had canceled it about 4 months after I filed.

I have read where some people are allowed to obtain one, but I would assume that is a special case.

[eap82]

@eap82 I had a card that had a zero balance and was not listed in the ch. 13. Didn't think too much about it until I tried to purchase something on Ebay for a few dollars where the card was saved, and it was declined. Come to find out they had canceled it about 4 months after I filed.

I have read where some people are allowed to obtain one, but I would assume that is a special case.

Thanks, maybe it’s just not updated. When I asked my attorney if I could keep one she said maybe it it’s paid off. I guess I’ll just wait and see what my confirmation says when it comes through.

[justbroke]

I wasn't going to chime in as this thread is doing well on its own. I don't know of any Trustee (Chapter 7 or Chapter 13) that will let you keep credit cards in a bankruptcy. The real issue is as shipo mentioned. Some $0 balance cards may appear to have survived only to be closed when you try to use them. I had a Jared's card with a significant credit line that survived. I poke the bear and asked for a credit line increase and it was summarily closed... due to bankruptcy.

I was allowed to obtain a secured card ($5,000 AMEX) during my Chapter 13 as I needed it for work/travel.

[shipo]

Circling back to your original post...

I’d like to charge a small amount, like groceries and then pay it right off in order to maintain my positive payment status and keep the card open.

This will be the domain your debit card for the next three to five years (depending upon your plan).

[eap82]

I wasn't going to chime in as this thread is doing well on its own. I don't know of any Trustee (Chapter 7 or Chapter 13) that will let you keep credit cards in a bankruptcy. The real issue is as shipo mentioned. Some $0 balance cards may appear to have survived only to be closed when you try to use them. I had a Jared's card with a significant credit line that survived. I poke the bear and asked for a credit line increase and it was summarily closed... due to bankruptcy.

I was allowed to obtain a secured card ($5,000 AMEX) during my Chapter 13 as I needed it for work/travel.

I’m curious about this because I thought they still did a credit check. Did you burn Amex in you bankruptcy?

[shipo]

I’m curious about this because I thought they still did a credit check. Did you burn Amex in you bankruptcy?

I'm curious as well, and yes, I did effectively "burn AMEX" in my Chapter 13.

[justbroke]

Yes, I did burn AMEX, but that was in 2008. As for when I was in the Chapter 13, it was a co-branded card and was not issued by AMEX themselves. For what it's worth, I'm back in the good graces with AMEX. I thought it was normally 20 years, but they seem to like me now.

[shipo]

Yes, I did burn AMEX, but that was in 2008. As for when I was in the Chapter 13, it was a co-branded card and was not issued by AMEX themselves. For what it's worth, I'm back in the good graces with AMEX. I thought it was normally 20 years, but they seem to like me now.

Very cool; which co-branded AMEX card did you use, I'm thinking to look into it.

Edit #1: the only Secure AMEX I see out there is via USAA; is that the one?

Edit #2: it seems USAA no longer offers a Secured AMEX, and unless I'm missing something, there are no other card issuers currently offering a Secured AMEX, so, I'm outta' luck.

[justbroke]

Very cool; which co-branded AMEX card did you use, I'm thinking to look into it.

First National Bank of Omaha (FNBO). I don't know if they have the secured AMEX any longer.

Edit #1: the only Secure AMEX I see out there is via USAA; is that the one?

I was and I still remain a member of USAA, but didn't try to get that one. I did, however, look at their AMEX later and decided that the one I had was sufficient.

Edit #2: it seems USAA no longer offers a Secured AMEX, and unless I'm missing something, there are no other card issuers currently offering a Secured AMEX, so, I'm outta' luck.

I didn't even notice!

Funny thing, I actually used the AMEX Serve prepaid for a little while, but it didn't quite have the punch of a "real" credit card. The FNBO American Express is still in my wallet. Member since 2014.

[shipo]

Thanks justbroke, I just checked the FNBO web site and the only Secured Credit Card they now offer is a FNBO branded Visa; looks like they've brought secured cards inhouse.

[shipo]

Thinking about the recent conversation here regarding AMEX, I wonder if all co-branded AMEX cards are subject to the same extreme scrutiny as full on AMEX cards. Said another way, I'm wondering if applying for the Delta SkyMiles Blue AMEX is something which I might get approved for in another year or two versus waiting whatever is the draconian waiting period usually applied to AMEX cards.

[justbroke]

shipo it depends on the issuer. If the issuer is American Express then you would be subjected to the so-called blacklist. If it's a licensed product, such as USAA or FNBO, then it would not be subjected to AMEX rules on previous cardholder debt.