More than 1.4 million Americans claimed bankruptcy during the preceding year as of September 2011 (the latest statistics available), punctuating the frustration many Americans felt at the height of the economic crisis. Filing for bankruptcy protection under either Chapter 7 or Chapter 13 requires overcoming extreme emotions. We fear the social stigma of being classified "bankrupt," and we fear getting rejected for credit cards, checking accounts and other basic financial services.
Lenders understand that a bankruptcy rarely reflects your true relationship with money. A Texas A&M University research team found that more than 4 out of 5 bankruptcies resulted from "adverse events" outside the control of filers. According to studies published in The American Journal of Medicine, more than half our country's bankruptcies involved significant medical debt of over $5,000.
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Card issuers are willing to lend to consumers with recent bankruptcies on file, because they cannot file for another bankruptcy, and so default on their new credit lines, for several years after the latest bankruptcy discharge. The kinds of credit cards that are offered to the recently bankrupt consumers typically come with a low credit limit, an annual fee and a high APR and require a security deposit, but are better than the alternatives in the form of prepaid cards. For more: http://blog.unibulmerchantservices.com/why-banks-want-to-give-you-credit-cards-after-bankruptcy.
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