Top best credit cards after bankruptcy
When you are recovering from bankruptcy filing, opening a credit card is an important part of rebuilding your credit. It’s easy to get the best credit card after bankruptcy, keep fees to a minimum, and report monthly activity to large credit bureaus.
Although there are many credit cards available for customers who have filed for bankruptcy, it is difficult to find good options that do not bury you in the fees. We’ve compared bankruptcy credit card options to find the best one.
Should You Get a Credit Card After Bankruptcy?
A credit card can help you rebuild your credit and finances after bankruptcy. Credit cards can not only make it possible for you to include positive dates in your credit reports, but they can also help you to re-learn positive money habits. But you should only take this step if you are ready to use a credit card such as a debit card. That is, use your credit card only for purchases you can’t afford right away, with no financing.
If you are not ready to take out an open-ended loan, a personal loan is another option to create credit. Instead of a line of credit that is renewed every time you pay your balance, you will be accepted for a lump sum of cash, which you will repay in a fixed month. Read our full comparison to decide between a credit card and a personal loan.
Best credit cards to get after bankruptcy
Best overall: Discover it Secured Credit Card
Discover it® Secure Credit Card is our first suggestion for credit card bankruptcy because you will face limited fees and the rewards you can get. This card does not charge an annual fee nor does it charge a foreign transaction fee. You’ll also avoid late payment fees on your first late payment (up to $ 40 thereafter), and you’ll have free access to your FICO score on your monthly credit card statement each month.
In terms of rewards, the card returns 2% cashback (then 1%) on up to $ 1,000 in combined expenses at gas stations and restaurants each quarter, as well as 1% on all other purchases. Discover will also match all the rewards you receive after the first year.
Best starter card: Capital One Platinum Secured Credit Card
The Capital One Platinum Secured Credit Card is another secure credit card without an annual fee and is easy to get started with an initial deposit that is at least $ 49, $ 99, or $ 200, but pays off ($ 20 minimum) ) Can be done in installments. First 35 days of your request. Also, note that Capital One will automatically consider you for a high credit line in less than 6 months with timely monthly payments.
This card does not offer any rewards, but you should avoid paying foreign transaction fees. Cardholder benefits include Fraud Coverage, Emergency Card Services, and MasterCard ID Theft Protection.
Best with no credit check: OpenSky Secured Visa Credit Card
If you are worried about not being approved for bankrupt credit cards, then the OpenSky® Secured Visa® credit card will give you a lot of peace of mind. This secure credit card doesn’t even check your credit when you apply, which means almost anyone can be approved.
This card comes with an annual fee of $ 35, and you will pay a 3% foreign transaction fee on purchases made outside the United States. However, you can start with an initial deposit of at least $ 200 and your credit movement will be reported to all three credit bureaus.
Best for balance transfers: UNITY Visa Secured Credit Card
This card charges an annual fee of $ 39, yet you may be eligible for an initial credit limit starting at $ 250 and your payments will be reported to all three credit bureaus. What makes this card stand out is the offer to transfer its current interest rate and introductory balance, which can be life-saving if you need to avoid high-interest loans.
Once approved for the UNITY® Visa Secured Credit Card, you will be eligible for a fixed APR of 17.99% on purchases. However, the balance transfer is eligible for an introductory APR of 9.95% for six months, after which the standard fixed interest rate is 17.99%. Note that a 3% balance transfer fee (minimum $ 10) applies.
3 Tips for Using a Credit Card After Bankruptcy
It may take some time for your credit to improve after bankruptcy. But with the right card and financial information, you can begin the process – and by adding enough positive information to your credit history over a long period of time, your credit score should start to improve along with your credit rating (also called credit score).
Here are some tips to keep in mind when using credit cards after bankruptcy and focusing on improving your credit health.
- Always pay on time. It is important to make timely payments to improve your credit after bankruptcy. Since payment history is the most important factor in your credit score, any missed payment can significantly reduce them. You will likely be charged extra interest in addition to the late payment fee and you may face a higher penalty APR if you pay late.
- Keep your credit card balance low. After the payment date, the second most important factor in your credit score is how much credit card issuers have given you compared to how much credit you are using. This is known as your credit usage rate. It is usually best to keep it below 30%.
- Create an emergency fund. Setting up an emergency fund and planning for a financial emergency can also help keep you out of credit card debt. If you budgeted during your pre-bankruptcy credit counseling session, this might be a good place to start. Then consider opening a savings account, so that you have the funds to cover the unforeseen expenses. And get in the habit of regularly reviewing your credit reports and checking for errors to monitor your improvement.
How long after bankruptcy should you apply for a credit card?
You can apply for a credit card after your bankruptcy, but you will need to be realistic about the type of credit card you may be eligible for. In general, you will have a better chance of getting credit card approval for bad credit after bankruptcy. You may also want to consider a secure credit card that requires a cash deposit as a guarantee of getting the card approved.
How Credit Cards Can Help You Build Your Credit?
Credit cards help you build credit based on the simple fact that all your movements are reported to Credit Bureau Experien, Ecofax, and Trans Union. Once you are approved, if you use your credit card responsibly, you will gradually improve your credit score. For example, make sure you pay your credit card bill every month in advance or on time. In the meantime, try to keep your credit usage to less than 30% for best results. This means you have to maintain a balance of $ 3,000 or less for every $ 10,000 of available credit.