pay credit card in 13?

[lrjax05]

If I claim all my credit card debts in 13, can I still use that card afterwards? Or will the credit company cancel that card? Will it be hard to get another credit card for use later on?

[HHM]

In this context, bankruptcy is bankruptcy, the credit card companies will close the account.

However, you need to assess your priorities, the goal of a chapter 13 is to pay cash for all expenses and break the credit card addiction.

[IBroke]

If I claim all my credit card debts in 13, can I still use that card afterwards? Or will the credit company cancel that card? Will it be hard to get another credit card for use later on?

To keep the convenience of CCs BUT get rid of the burden they bring along, I suggest a secured CC from your local Credit Union..

[HHM]

To keep the convenience of CCs BUT get rid of the burden they bring along, I suggest a secured CC from your local Credit Union..

You know what, you get the same convenience from a DEBIT CARD.

Secured Credit Cards and Regular Credit Cards are all about spending money you don't have. Guess what, if you can't pay for something with the money you have in your bank account, don't buy it until you do.

[relief13035]

Guess what, if you can't pay for something with the money you have in your bank account, don't buy it until you do.

That's our new motto!

[tkharvey]

Absoutely!!! I don't worry about getting another credit card after bankruptcy! I DON'T WANT ONE! Cash basis from here on out....

[sassiebaz]

Yep, cash it is.....

[IBroke]

Secured Credit Cards and Regular Credit Cards are all about spending money you don't have.

Please tell me how I can spend money I don't have on a secured credit card?! I must have the money to get the card in the first place, right? I wouldn't even consider a secured card a "credit card" since I'm actually granting credit to the bank and not the other way round. If you are not able to pay the bill, simply close the account and wait for your check for the balance. In addition, I wasn't talking about a $5,000 card. The secured card I have has a $300 limit resulting in a minimum monthly payment of $20 when it's maxed out. In addition, a debit card does NOTHING to re-establish credit. Although there's nothing wrong with structuring your new financial life on a cash-basis, you never know if you might need credit again in case of an emergency.

Many people regret they DIDN'T re-establish credit right after their discharge.

[falken]

Please tell me how I can spend money I don't have on a secured credit card?! I must have the money to get the card in the first place, right? I wouldn't even consider a secured card a "credit card" since I'm actually granting credit to the bank and not the other way round. If you are not able to pay the bill, simply close the account and wait for your check for the balance. In addition, I wasn't talking about a $5,000 card. The secured card I have has a $300 limit resulting in a minimum monthly payment of $20 when it's maxed out. In addition, a debit card does NOTHING to re-establish credit. Although there's nothing wrong with structuring your new financial life on a cash-basis, you never know if you might need credit again in case of an emergency.

Many people regret they DIDN'T re-establish credit right after their discharge.

2 possible bad things with a secured card:
Lets say you deposit $500 on your secured card.
1) You can't afford to pay the entire balance when it comes... You are now paying the bank 10-18% APR on your own money, which the bank gets to keep.

2) For whatever reason, you can't make the minimum payment and have charged it to the max. You now get the default APR charged, late fee, and a overlimit fee.

Read the agreement, any secure card I have seen does not allow you to close the account and get your money back unless there is a $0 balance.

After you have been in default for 90-150 days they will close the account, take the money you deposited and apply it to your balance, and send you a bill for the rest. In the $500 example that could add up to $450 in extra charges (30%APR, $39/mo late fee, $39/mo over the limit).

Now, if none of these happen, yes, it will help rebuild your credit. But don't say there is 0 risk on the secured credit card.

[HHM]

Please tell me how I can spend money I don't have on a secured credit card?! I must have the money to get the card in the first place, right? I wouldn't even consider a secured card a "credit card" since I'm actually granting credit to the bank and not the other way round. If you are not able to pay the bill, simply close the account and wait for your check for the balance. In addition, I wasn't talking about a $5,000 card. The secured card I have has a $300 limit resulting in a minimum monthly payment of $20 when it's maxed out. In addition, a debit card does NOTHING to re-establish credit. Although there's nothing wrong with structuring your new financial life on a cash-basis, you never know if you might need credit again in case of an emergency.

Many people regret they DIDN'T re-establish credit right after their discharge.

But you are buying into the Myth that you actually need a credit card to re-establish credit. There are 3 things that will re-establish a persons credit.
1. The bankruptcy. The bankruptcy puts a stop to the bleeding on the credit report, so to speak.
2. Making sure all entries are reported properly on your credit report (zero balance IIB, etc.).
3. And most importantly, the passage of time. More than ANYTHING ELSE, the passage of time will heal your credit score.

Also, you are talking about using credit while in a chapter 13, a big no-no as you are generally not allowed to incur new debt while in an active chapter 13.

[IBroke]

Also, you are talking about using credit while in a chapter 13, a big no-no as you are generally not allowed to incur new debt while in an active chapter 13.

No, I'm not. I said:

"Many people regret they DIDN'T re-establish credit right after their discharge."

[IBroke]

2 possible bad things with a secured card:
Lets say you deposit $500 on your secured card.
1) You can't afford to pay the entire balance when it comes... You are now paying the bank 10-18% APR on your own money, which the bank gets to keep.

2) For whatever reason, you can't make the minimum payment and have charged it to the max. You now get the default APR charged, late fee, and a overlimit fee.

Read the agreement, any secure card I have seen does not allow you to close the account and get your money back unless there is a $0 balance.

After you have been in default for 90-150 days they will close the account, take the money you deposited and apply it to your balance, and send you a bill for the rest. In the $500 example that could add up to $450 in extra charges (30%APR, $39/mo late fee, $39/mo over the limit).

Now, if none of these happen, yes, it will help rebuild your credit. But don't say there is 0 risk on the secured credit card.

I never said there is 0 risk in using a secured credit-card. I only disagreed that using a secured card equals spending money you don't have which is simply wrong. EVERY SINGLE CENT you're spending on a secured card must have been deposited/paid on such account BEFORE you can even spend it.

Did you know that you can end up in debt using your bank DEBIT-card if you use it out of state?
You could actually end up spending more than what you have available on your bank-account. Sounds strange but yes, it happened to me already. The bank will charge you for each transaction made that is over your available funds - most of the time, a whopping $30 or more each.

In addition to that, there is a risk involved in using a debit-card which is directly linked to your bank-account. You don't want to use that card online. If you get a debit-card, I suggest a Wal-Mart card.

And stating that you get the same convenience from a debit-card is not 100% true either. Now try to rent a car with such a card...

[optimistic1]

I have rented cars with my debit all the time.

[IBroke]

I have rented cars with my debit all the time.

You might have been fortunate then. Most mayor rental companies do NOT accept debit-cards. I learned that the hard way thousand miles away from home.

[Flamingo]

You might have been fortunate then. Most mayor rental companies do NOT accept debit-cards. I learned that the hard way thousand miles away from home.

Most do but there are restrictions. I utilize Enterprise quite frequently although I have a credit card for rental and travel purposes and don't have to use a debit card. They advertise they take debit cards but certain restrictions apply.