Can I Get a Credit Card After Bankruptcy?

A 2024 UK Finance report highlights both the rise in credit card use and a rise in exceeding spending limits on those cards. With so many people increasingly relying on credit for daily living, what happens if the debts exceed your ability to pay and you find yourself bankrupt?

Can you get a credit card while bankrupt?

The answer is not as simple as yes or no, as we’ll explain below.

What Can I Do as an Undischarged Bankrupt?

If you have chosen bankruptcy or a creditor has petitioned for you to be made bankrupt, there are certain regulations you must abide by. These regulations will last for at least 12 months (the normal time for bankruptcy to be discharged) but can last longer if you do not abide by them.

Consideration will be given to your daily living needs, including how to get to work or care for a loved one. Beyond that, any income or assets will likely be taken by the official receiver to repay creditors.

It is a legal requirement to disclose your bankruptcy to any lender if you are seeking to borrow £500 whatever source of credit you are looking for.

Can you get a credit card while bankrupt?

It is possible to apply for a credit card while you are bankrupt as long as you disclose your bankruptcy. The lender will do a credit check as part of deciding if they will grant you credit. Being an undischarged bankrupt is an indicator that you haven’t been able to repay debt in the past and may make it more difficult to be approved.

Can I get a Credit Card After Bankruptcy?

Whatever the circumstances of you becoming bankrupt, once the bankruptcy has been discharged it is likely the remainder of the debt will be written off (there may be exceptions to this) and you can begin to rebuild your financial life. While you’re not obliged to tell people you were bankrupt, unless they ask directly, your bankruptcy will remain on file with the Insolvency Register for three months and on your credit score for six years. This means that if you apply for a credit card, the lender will see that you were bankrupt when they do a credit check. This may mean they say no, or it may mean the offer higher fees as they see you as a higher credit risk.

Increasing Your Credit Score After Bankruptcy

To increase the likelihood being approved for a credit card after bankruptcy, it’s important to apply for a free confirmation letter stating you are now a discharged bankrupt (that is, you are no longer bankrupt). You can also start to build your credit score by making timely repayments on your utilities and other expenses.

As a discharged bankrupt you may still be considered a high risk to lenders so you may need to pay higher interest rates on a credit card or other credit in the early years following your bankruptcy.

Talk to an Insolvency Expert for Information You Can Trust After Bankruptcy

For help to understand the legal and financial implications of getting a credit card while bankrupt, contact Irwin Insolvency today for expert advice.