Once your Chapter 7 or Chapter 13 bankruptcy is over, it's time to get your finances in order and begin rebuilding your credit. A big part of financial health is avoiding the numerous credit card scams and bad deals aimed at consumers. The last thing you need after bankruptcy is to land in a pile of credit card debt again.
Here are some common ripoffs and scams to watch out for.
Credit cards that can only be used to buy things from a catalog. You've probably received offers for a "credit card" that allows you to shop from a catalogue filled with appliances, clothing, gifts, and more. Beware. A true credit card company doesn't force you to shop by mail for overpriced junk that you probably would never use anyway. Don't let their high credit limits lure you into the trap -- avoid this potentially dangerous offer at all costs!
Overlimit fees. If you opt into the card issuer's program to charge over-limit-fees, you will be allowed to make charges over your credit limit. Seems like a good way to avoid the embarrassment of having your card turned down right? Not so fast. Banks often charge a separate fee for each charge over the limit, and the fees can be high. Thanks to the new Credit Card Accountability and Disclosure Act of 2009, banks cannot charge over-the-limit fees unless you affirmatively opt into the program. Don't opt in.
Companies asking you to call a 900 number. Watch out for credit offers from any company asking you to call a 900 or 967 number. They will entice you to call them by offering a secured bank card, but really all you get when you call is a huge phone bill! These companies often charge you by the minute for your phone call and go as high as $20.
Credit cards with teaser rates. Some credit cards offer a low introductory rate for a few months, and then the rate skyrockets when the introductory period is over. Read all credit card offers carefully, and make sure you know what the long-term interest rate will be.