Recommendations / Advice on a credit card while in Chapter 13?

[TrackDog]

My wife and I are currently in Chapter 13 and have been doing fine with the budget and getting by with our debit card. I would like to get a credit card to start building credit and have a "fall back" in case of emergencies. I understand that I'm looking at annual fees, low credit limits, etc... Just looking to see what others have done and what worked or didn't work for them.

Thanks!

[AngelinaCat]

I understand wanting to rebuild your credit and all, but do not fall for the 'fall back' scenario for the credit card. It is far to easy to 'fall' into the scenario of "well, its only a couple dollars over what I have in my wallet......., and then there you go on the downhill train to debt slavery again. As Flamingo has in her signature: "A credit card is a snake in your pocket."

Have a 100 dollar bill folded up in your wallet, and in the DW's wallet--and forget that they are there. Those are for TRUE emergencies, like when you are stranded on the road. For everything else: Budget, budget, budget, and budget some more.

I do understand. I miss not having the money I used to spend, and I was always frugal and shopped the sales and the thrift stores. I am still learning to tighten up and it is hard.

Good luck!!

[woeisme]

You need to check to see if credit is even allowed during your CH 13. My trustee will allow up to $500 but anything over that requires prior approval and a darned good reason. I've managed to build up a few thousand as an emergency fund, which is much more than I'd be allowed to get as a credit card, and I have access to it via my debit card for emergencies. (When you save up the $ yourself, believe me, your feelings on what is an actual emergency change too!) It was so hard for me when I started my CH 13 over 3 years ago, I lived by the "security" of my credit cards for 20 years and had no idea how I'd manage without them as a backup... but believe it or not, have managed. There have been fretful moments, for sure. And if it's credit repair you really want, time is your best friend, not credit cards. Last time I checked my credit score was ~650, and I'm still in an active 13 without any credit cards, I imagine in a year and a half when I'm finally discharged, it will rebound up pretty good. (I have some disputes with how creditors are reporting that should really help, but figure there is no point in doing that until discharge.) If you "have" to have a credit card for emergencies, try Orchard Bank, we get solicitations from them almost weekly, but you'd be much better off not giving anyone annual fees and saving up for emergencies instead, in my opinion. Best of luck!

[momofthree]

Ditto the others. Your "fall back" should be cash sitting in a bank account. You can always carry a debit card for that account in case of emergencies. If you learn nothing else from you bk, I hope you learn that lesson. If you aren't able to save at least a few hundred dollars each month, then you're either not following your budget plan correctly, or your budget that your attorney set up for you isn't realistic. Even we ($20k below median income, couldn't even afford to claim full IRS standards on budget) have managed to save close to $4k in the last year since we've filed. If we can manage to scrimp and save, then anyone can!

[daleintampa]

Bad idea !!!! Credit cards are why people get there credit in trouble in the first place. If
You want an emergency fund. Save the money and leave it alone.