Free Credit Cards for Bankruptcy Clients

– are they really free?

First Premier, Orchard, Centennial, Horizon, Applied and Aventium Banks are only a few of the many banks who take advantage of debtors who file bankruptcy.  Here is how their legitimate scam works:

1.  The debtor is sent an offer to rebuild their credit with the kind and generous support of the bank.  Normally, the card is mailed with no request for an application to be completed and an actual credit card is also sent for instant activation.

Note: The debtor is normally not aware that once they file bankruptcy, they will not be eligible to file for several years, so this debt could be around for a long time.

2.  The debtor is given a pre-approved credit limit of a whopping $200, $500, $700 or other small amount.

Note: In the Initial Disclosure and Important Information About Fees, Rates, Costs, Limitations, Available Credit and Other Terms (for one of the banks; which few people never take the time to read) it states the following fees for obtaining a $700 credit card:

a.  25.00 (one time processing fee)
b.  $150.00 (one time first year annual fee)
c.  $174.00 (annual servicing fee)

In addition, the Annual Percentage Rate is 36 percent and there is a $35.00 fee for late payments.

Note: I personally am aware that credit card companies who participate in legitimate scams like these have been known to intentionally hold mail and not post payments to customer accounts in order to apply the $35.00 fee to as many accounts as possible.  This late fee is reported to the credit bureau and any good standing the debtor obtained is now lost.


If you are a bankruptcy attorney, it is suggested that you relate this important information to your clients.  Banks like these purchase lists of those who file bankruptcy so it is very likely that your clients may receive a mailbox full of offers from companies offering legitimate scams like these.

However, similar credit card offers do nothing to help build the credit of those who file bankruptcy.  These legitimate scams only prey upon people who are financially struggling. They have no concern whether the debtor rebuilds their credit or not. Their only concern is making money and getting paid.

Also, banks know that debtors filing bankruptcy normally have a lot of credit card debt.  When the debtors no longer have credit cards, they feel lost for a period of time during the transition from being in debt to being debt free.  This is the time that illicit scams are offered to debtors.

Help your clients to stay out of debt so they never need to file bankruptcy again. Teach your clients that filing bankruptcy may be their key to becoming debt free and give them a book by Dave Ramsey so they learn to live a debt free life.

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