If you’re a bankrupt you are a poor credit risk. Ergo, you can’t get a credit card easily. Here are a few suggestions for the needy:
1. A secured credit card from a foreign bank.
A UK or US bank might not touch you, but a Caribbean or Eastern European bank might take you on. As such banks are prone to go bust, don’t put all your cash in such an institution.
They require a cash deposit to back up the card. It can go from £2000-£5000 depending on the bank. A cheaper alternative is:
2. A pre-paid debit card.
Western Union are the most well known company offering these in the UK. They’re more common in the US. Not a credit card, but handy for internet purchases and the like. An alternative if you need electronic money and a MasterCard logo.
3. Setting a Budget: The most basic place to start getting yourself out of debt is by setting a strict budget. If you restrict yourself to a certain spending amount, you will avoid over-spending, and make sure that you have enough money to pay each of your bills without having to worry.
Setting a budget will only work if you can restrain yourself enough to follow it strictly. The first time you break your budget you will be back in the same situation you came from. To deal with credit card debt, it would be helpful to put a temporary block on your cards until you are on track and you know that you can use them without over-spending again.
4. No Impulse Buys: One problem with credit cards is that they allow you to make a purchase pretty much whenever you want, without really considering whether you can afford it or not. This is both a blessing and a curse. Sure, it can get you new stuff immediately, but the debt builds up in the end, and that’s where your problems begin. Watch out for buying things that you don’t really need or you haven’t budgeted for.
5. Destroy Credit Card Offers: If you have put yourself in a situation where you are constantly getting new credit card offers, the best thing to do is to destroy them without even looking at what they have to say. If you take the time to look at what they are offering you are 100% more likely to consider whether you should accept or not. On the other hand, if you deny them the opportunities to make the offer in the first place then you are saving yourself a ton of trouble.
6. No Joint Accounts: One of the biggest mistakes you can ever make is opening a joint account with someone who has a habit of accumulating a lot of debt. If you are sharing an account with someone like that, you will be throwing your own good credit away, and possibly scarring your credit report for years. If your account is shared with someone who has a lot of credit cards, your best bet would be to separate the funds as soon as possible to avoid putting yourself in a hole that you can’t get out of. If you are put into debt by someone else’s spending you will have quite a difficult time trying to work your way out of it without their complete compliance, which may be just as difficult to get.
7. No Risky Investments: If you are aware of the fact that you do not have the cash ready to pay for a large investment, it is best not to get involved using a credit card. This could eventually push you into bankruptcy if the return on the investment is not enough to pay off the credit card debt later. Not to mention the fact that you cannot guarantee that you will ever get anything in return from a risky investment, which will leave you with even more debt.
