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    Question Credit Card while in chapter 13 active

    I have been in Chapter 13 around 8 months. I keep getting Credit Card invitations in the mail. I was wondering if it is OK to accept the offers to start building credit score back. I remember that we should not add extra credit while in Chapter 13. Will accepting the offers jeopardize my Chapter 13 case? I am wondering why credit card companies keeps sending the offers. I am sure they can find out my status.

    #2
    Hi - what does your confirmation order say? Some allow small amounts of credit to be used but most do not. If not, now is not the time. You may get bombarded with offers, but when your credit is run the creditor will find you’re in Bk and most likely rescind the offer. So many people want to rebuild credit so soon in the process....give yourself time..get through your plan, then focus on rebuilding. Only my opinion.
    Filed Chapter 13 - 07/20/12
    Discharged 8/2/16

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      #3
      anunezal, I got lots of credit card applications in the mail for maybe two and a half years; just to see what would happen I applied once and was instantly denied due to my active Chapter 13. That and I got a hard pull on my credit as a result.

      My advice would be to toss the offers in the trash and wait until after your Chapter 13 is over.
      Latent car nut.

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        #4
        It depends on your confirmation order. In my district, you are allowed up to $1000 without court/trustee permission. I interpreted that as using $1000 credit such as an installment loan or showing a $1k balance on a revolver. But a $2k revolver with zero balance should be fine IMHO.

        Some of the offers have huge fees. Those need to go to the shredder. But if you find a card with low fees or no fees and the trustee doesn't care, I say go for it but never use it except for token $1 amounts to keep the account alive. You should continue to run your household on a cash basis just like before.

        You cannot carry a balance that will result in paying over time because the ch13 budget is so tight already.

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          #5
          Thank you for the feedback. I saw some of the offers with big annual fees. I was just wondering as yesterday I got one offer from Capital One with $0 Annual Fee. I don't need the credit card at all. So I guess i will just wait till the end.

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            #6
            We used to get offers in the mail every week from a knock off of Capitol One (similar name but low credit line and high fees). I think they stopped earlier this year. I believe our credit scores are around 700 now, so that may be the reason or because we just never replied!
            Good luck on hopefully getting a credit card when you need it!

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              #7
              Originally posted by Barbisi View Post
              We used to get offers in the mail every week from a knock off of Capitol One (similar name but low credit line and high fees). I think they stopped earlier this year. I believe our credit scores are around 700 now, so that may be the reason or because we just never replied!
              Good luck on hopefully getting a credit card when you need it!
              I'm guessing that offer came from "Credit One".

              I got one from them shortly after my discharge came through, the annual AND monthly fees were stupid high; I immediately tossed the offer in the trash.
              Latent car nut.

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                #8
                My husband and I get a lot of offers, too. I have felt like applying, but never have. We are allowed to have $500 each. Not sure how one would get just $500 each on a card unless it is a higher limit and you don't charge over $500. It sounded to complicated so I decided just not to worry about credit rebuilding right now. The only credit I had was using a service and I don't remember the name, but when I ordered two pairs of shoes for my daughter's birthday there was an offer to pay in 4 installments--maybe that's not credit maybe it's more like the payment plan on your phone. You can get a phone and make payments over two years and that doesn't count as "credit."

                When we are done with our Chapter 13 we will still have the car loan. I am trying really hard to be on time so that loan will show a good history and help rebuild. I have been late with it on occasion. I could kick myself for being late the other month because it has a cut off of 3 p.m. to pay it and I was paying on a Friday so it didn't credit till Monday going past the end of the grace period. Oh well, right now it doesn't matter we are approaching the 2.5 yr mark.

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