Did I mess up getting a credit card

[huskydawgs]

I'm currently 26 months into my 5 year payback of my Chapter 13.

I talked to my trustee and they said if I qualified, I could get a credit card to start boosting my credit score while in Chapter 13.

I did get an Orchard Credit Card for a $500 limit (I've had it for 6 months and have been paying my $65 phone bill and paying it off every month).

I just read Dave Ramsey though. Did I mess up not waiting until after discharge to get a credit card?

"First of all, don't worry about re-establishing your credit. If you go three or four years after bankruptcy without borrowing a dime, then you'll add no new entries to your credit bureau report. This will help show a potential mortgage lender that you learned from your mistakes the first time around. The definition of insanity is doing the same thing over and over and expecting different results. Getting another credit card after all you've been through would be really dumb."

- Dave Ramsey

[dneil]

I personally don't think you screwed up. A lot of people get one or two cards with small limits on them so that they can demonstrate their ability to use credit wisely. Never go over 30% of your credit limit as this can lower your score. So, with a five hundred dollar limit, the most you will ever want to carry as a balance is 150 (tops).
I am not the know all of everything, but from what I have read here and in other information regarding bankruptcy, it is okay to have one or two cards with small limits to demonstrate that you can use credit wisely. Best of luck to you

[lrprn]

As long as your trustee is ok with you getting the credit card *and* you pay off the credit card balance in full every month, you should be fine.

Consider saving the credit card to make small, regular purchases (like gas), don't use it for anything else, and don't allow Orchard to increase the credit limit. If you had "credit card disease" before filing where you charged to bridge gaps in your income or to get things you really didn't need for immediate gratification, then you will want to be very careful using a credit card again so you don't fall back into old bad habits. Like any addiction, unfortunately it's way to easy to do.

Good luck and I hope the new cc does what you hope it will.

[huskydawgs]

Should I switch to another credit card? $60 annual fee is alot.

[Flamingo]

Should I switch to another credit card? $60 annual fee is alot.

You probably will not be able to find a credit card during an active Chapter 13 without some sort of annual fee or some other fees. Stick with what you have and be happy with it and follow the advice given to you above. After discharge when you get your financial house in better order, that would be the time to investigate getting a better card; but in the interim, pay this one on time, never be late and don't be late with any of your plan payments or any other bills (i.e., phone, utilities, etc.). All that will pay off in due course as to your future credit.

[Kuya]

You did not screw up. My attorney and Trustee approved credit card as long as I never charged over a certain amount at one time. I did the same thing you are doing. I had a few cards with low limits. I paid yearly fees but I felt it was worth it to build back my credit.

I walked out after 5 years, and have a Trans Fico score of 701, upon discharge. Not too shabby. Use the card wisely. Don't ever use it to live. Use it to build. Good luck