Will Credit Cards Hurt My Credit Score After Filing? Reasons A Bankruptcy Lawyer Says They Can Help!

An inexperienced bankruptcy attorney or financial counselor might advise someone to just get rid of their credit cards entirely. Makes sense on the surface, right? The thought process is that if you don't have a lot of access to funds, you won't spend as much, and it's tempting to say you'll never get a credit card again. But a cash-only existence doesn't always provide for emergencies, or even make financial sense. As an experienced bankruptcy attorney, I usually recommend my clients get one credit card (and use it responsibly) after they receive their bankruptcy discharge.

That means for regular, necessary expenses and emergencies only (as I have often explained to my marketing assistant, shoes do not constitute emergencies). You should aim to fully pay the card off each month to avoid excessive interest charges. You'd be surprised how much your credit score will raise if you make regular payments on a revolving account like a credit card.

The following are reasons why I tell my clients to get a credit card:

1. Any type of closed financial accounts can weigh down your credit score. A closed out account, no matter what type, is a negative on your credit report. If you suddenly went from having three credit cards to having zero, your score would drop substantially.

2. In the state of an emergency, you might find it helpful to have a credit card available. Bad things happen to everyone at some point. We understand. But say something happened to your family car, and you needed to get it fixed so that you could get to work. You know the pitfalls of payday loans. Having a card on hand for emergencies could be a solution.

3. They can be helpful to raise your credit score if you use them responsibly. Typically, after a client receives their bankruptcy discharge, we see their credit score go up (because all the debt weighing it down has been erased). After getting the "bankruptcy bump" maintaining the positive increase. Getting a credit card and using it responsibly is a big part of establishing good credit. This means spending reasonably for your credit limit, then paying it off every month (and we mean the whole bill, not just the minimum payment).

As you can see, using a credit card responsibly can work to your benefit.You can also be prepared in case an unexpected emercency comes up, so don't be too set against them, in some ways they can help you.


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