Today, after watching some NFL games, I suddenly became curious about bankruptcy, so I did a quick google search and the first figure I found was astonishing. According to official records, in 2013 there were over 1 million non-business bankruptcy filings. 1 million. 1,000,000. On average, for every 300 people in the US you know, 1 of them filed for personal bankruptcy last year. This figuratively blew my mind.
So the topic for my blog post today was quickly decided.
You know, life happens. Someone in your family falls critically ill and you have to borrow money to pay for medical expenses without being able to pay it back. You lose a job because of the financial crisis and can no longer pay your bills. I offer my condolences to those that have a legitimate reason to file for bankruptcy. The road ahead, credit-wise, is going to be tough. Bankruptcy stays on credit reports for up to 10 years, and this is not the kind of record you want on your credit profile. Lenders that see bankruptcy when reviewing your credit report will not be very likely to extend you credit.
So, if bankruptcy is inevitable, how can you minimize its negative impact on your credit?
I have written this guide as a balanced approach to building credit if you are starting out. It is not intended to give you the maximum credit score, since that would require that you know perfectly how to manage credit from the beginning, an unrealistic expectation. If you follow this guide, at the end of the first year you should have a solid credit history that would allow you to get approved for most credit cards and obtain reasonable interest rates on auto loans.
Back in January I shared with you my personal experience with Bank of America throughout my credit journey: https://hiepsfinance.com/2013/01/30/bank-of-america-is-awesome/ . To sum it up, Bank of America has done all the good things for me: gave me a secured card with cashback rewards, unsecured it and eliminated the annual fee a year later, and then raised the credit limit six-fold! 2 days ago I took another step further and asked them to lower my APR of 20.24% typical of secured cards but a little high for a non-secured card.
The representative looked at my profile to see if my account would be eligible for a lower APR. Sure enough, she came back with a new interest rate of 11.99%, the lowest in my current credit card portfolio by a wide margin!
Let me clarify why I asked for a lower APR. I didn’t ask for an APR lowering because I planned to carry a balance; I wanted a low APR in case of emergency when I may have to make a large purchase without sufficient cash. If I had a house struck down by lightning for example, I’d need some cash flow available immediately to start rebuilding, and if I had just paid a large medical bill I probably wouldn’t have the cash at my disposal right away. In that kind of scenario, the BofA card with a relatively reasonable APR would come in handy.
I may give BofA another call in a few months to see if they can bring the APR down to below 10% – that would be the last thing I need from Bank of America for this incredible Cash Rewards card.
I am a loyal customer of Bank of America, at least for their credit card and banking products. If you are still looking for a bank to get your first credit card from, seriously consider BofA.
In the credit card universe, Bank of America is perhaps the most underrated. Despite being the 3rd largest credit card issuer in the United States of America, and bearing a really cool name, they are not often known for generous credit card offers. I wish they did a better job promoting their products since some are quite exceptional. One such an example is the BankAmericard Cash Rewards secured credit card.
Absolutely! I applied for my Bank of America BankAmericard secured credit card as an H-1B visa holders, and I wish I had obtained my first credit card when I was an international student at Colgate. By the way, to my American readers who may not be well-versed about immigration stati, any foreign citizen that is living in the US is classified by the IRS as an alien. Those like me that don’t have permanent residency either are called non-resident aliens. Someone from the IRS has a good sense of humor.
My first blog post covers the benefits or credit cards that are often ignored. I have also covered several features of credit cards in a variety of posts. I’ve always wanted to consolidate all these features in one post, and what better way is there than performing a hands-on analysis on a real credit card? Today’s post features Bank of America’s flagship BankAmericard Cash Rewards.
If you have filled out an application for a credit card, you’d you know that one of the mandatory fields is ‘annual income’. Other than your credit profile, this is the single most important factor that creditors use to determine your eligibility for credit. But what if you’re going to school and not making any money? You still have money from your bank accounts or from family, but you don’t have a regular income. No worries: financial institutions will take care of that for you. Many creditors offer a student version of their cards, which is just about as good as the regular version. Continue reading Credit cards for credit builders: what are your options? – Part 4
One and a half year after I graduated from Colgate University following a commencement where I sang the school’s traditional song with 3 friends in front of 7,000 people, I had yet another milestone graduation. For those of you that start your credit journey with a secured credit card, when your credit card gets converted to a non-secured card, your card is said to graduate. That’s what happened to my card. Continue reading Secured credit card graduation