Bankruptcy is a legal proceeding that can be a significant financial setback for an individual. This can lead to loss of assets, a substantial drop in credit rating, and difficulty obtaining credit. However, bankrupt people can use credit cards to help rebuild their credit scores. This article will look at the five best credit cards after Bankruptcy. The credit cards we will mention are considered good options after Bankruptcy, as they are designed for people rebuilding their credit.
1. Discover it Secured Credit Card – Best Credit Cards After Bankruptcy
The Discover it Secured Credit Card is an excellent option for those who have gone bankrupt and is the most prominent choice as a bankruptcy credit card. It’s a secured credit card, meaning you must deposit a line of credit. Deposit amounts range from $200 to $2,500.
The Discover secured credit card offers cashback, making it an attractive option. Earn 2% cash back per quarter on up to $1,000 on gas station and restaurant purchases and 1% cash back on all other purchases.
Plus, Discover will match any cashback you earn at the end of your first year.
Discover its secured credit card is that it reports to all three major credit bureaus. This means responsible card use can help rebuild your credit score.
Pros
- Cashback on every purchase
- No annual fee
Cons
- Requires a $200 minimum deposit
- High APR after the introductory period
Why use this card
This credit card is secure, so you must deposit before you can get the card. However, it continues to offer rewards, including cash back on purchases. Additionally, Discover can monitor your account after eight months to determine if you’re eligible to switch to an unsecured credit card.
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2. Capital One Secured Mastercard – Best Credit Cards After Bankruptcy
The Capital One Secured MasterCard is another great credit card option for those who have gone bankrupt.
It’s a secure credit card; you must deposit to start. Depending on your credit rating, deposits range from $49 to $200. The Capital One Secured Mastercard is an affordable option with no annual fee. It also reports to the three major credit bureaus, so responsible card use can help improve your credit score.
Pros
- No annual fee
- Ability to increase credit and responsible use limit
Cons
- No rewards program
- Above average APR
Why use this card
This secure credit card can help you build credit after a job. There is no annual fee, and you can get a higher limit once you make your first five monthly payments on time.
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3. Credit One Bank Platinum Visa – Best Credit Cards After Bankruptcy
Credit One Bank Platinum Visa is one of the Best Credit Cards After Bankruptcy with annual fees ranging from $0 to $99, depending on your creditworthiness. The card has a pre-qualification process that does not affect your credit score, allowing you to see if you qualify for the card before applying.
You can earn 1% cash back on qualifying purchases, including gas, groceries, and cell phone service. Plus, the card provides free online access to your Experian credit score, which helps you track your credit-rebuilding progress.
Pros
- Cashback on qualifying purchases
- Prequalification process that does not affect credit score
Cons
- High annual fees
- Low credit limit
Why use this card
This is an unsecured credit card designed for people who have got bankrupt. It offers rewards on eligible purchases, and you can increase your credit over time by using it responsibly.
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4. Indigo Platinum Mastercard – Best Credit Cards After Bankruptcy
The Indigo Platinum Mastercard is one of the significant unsecured and the Best Credit Cards After Bankruptcy. It’s an excellent option for those who want to avoid depositing money on a secured credit card.
The Indigo Platinum Mastercard has no rewards or cash-back offers. However, it falls under the three major credit bureaus, helping you rebuild your credit score by using the card responsibly.
Indigo Platinum Mastercard has annual fees ranging from $0 to $99, depending on your credit.
However, the card offers a pre-qualification process that does not affect your credit score, allowing you to see if you qualify for the card before applying.
Pros
- Prequalification process without compromising credit score
- Ability to choose the payment date
Cons
- High annual fees
- No rewards program
Why use this card
This credit card is also designed for Bankruptcy. There is no security deposit, but there is an annual fee. However, it can still be a good option if you want to restructure your credit.
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5. OpenSky Secured Visa Credit Card – Best Credit Cards After Bankruptcy
This Visa credit card is a secure credit card requiring a deposit. Depending on your creditworthiness, deposits can range from $200 to $3,000. It’s an excellent option for anyone looking to rebuild their credit score without going bankrupt.
The OpenSky Secured Visa credit card has no credit check requirements, making it an attractive option for those with low credit scores due to Bankruptcy. It is also know as the Best Credit Cards After Bankruptcy. It reports to the three major credit bureaus, so responsible card use can help improve your credit score.
OpenSky Secured Visa credit card does not offer rewards or cash back. However, its low annual fee of just $35 makes it an affordable option for those looking to rebuild their credit score without incurring high costs.
Pros
- No credit check requirement
- Reports to the three major credit bureaus
Cons
- No rewards program
- $35 annual fee
Why use this card
There is no security deposit, but there is an annual fee. However, it can still be a good option if you want to restructure your credit.
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How to choose the Best Credit Cards After Bankruptcy
After Bankruptcy selecting the Best Credit Cards After Bankruptcy is difficult, so make sure to consider the following factors:
1. Insured with a secured Credit Card
Secured credit cards require a deposit to get started, unlike unsecured credit cards. If you have a low credit score due to bankruptcy, a secure credit card may be a better choice as it can help you rebuild your credit score responsibly.
2. Annual fees
Some credit cards for bankruptcies have annual fees.
Considering these fees when choosing a credit card is essential because they can add up over time. Look for cards with low or no annual fees.
3. Rewards and refunds
Some credit cards that accept bankruptcies offer rewards or refunds after Bankruptcy. While not the most critical factor, it can be a nice plus.
Please look at the rewards offered and whether they match your spending habits.
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4. Report to Credit Bureaus
When choosing the Best Credit Cards After Bankruptcy, you should choose one that reports to the three major credit bureaus. Indeed, responsible use of your credit card can help you rebuild your credit score over time.
5. Prequalification Process
Some credit card issuers offer a prequalification process that does not affect your credit score. This can be a valuable tool to determine your eligibility for the card before applying.
Final Thoughts
These credit cards are great options for those looking to rebuild their credit after Bankruptcy. However, using credit cards responsibly, making all timely payments, and keeping fees low to avoid excessive borrowing is essential.
Bankruptcies can be difficult and stressful, but that doesn’t mean you can’t rebuild your credit score. When used responsibly, credit cards for defaults can be an excellent tool for rebuilding credit. When choosing a the Best Credit Cards After Bankruptcy, you should consider factors such as annual fees, rewards, refunds, credit bureau reporting, etc. By selecting and using the right credit card responsibly, you can rebuild your credit score and achieve financial stability over time.
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FAQs about the Best Credit Cards After Bankruptcy
Q. How long after Bankruptcy can I apply for a credit card?
A. You can apply for a credit card immediately after your Bankruptcy has been discharged, but getting approved for a credit card may be more challenging. Waiting at least six months to a year after your bankruptcy discharge is recommended before applying for a credit card.
Q. Will my credit score improve if I get a credit card after Bankruptcy?
A. Yes, if you use your credit card responsibly and make timely payments, your credit score will improve over time. However, seeing a significant improvement in your credit score may take some time.
Q. Can I get a secured credit card after Bankruptcy?
A. Yes, secured credit cards are a good option for people who have filed for Bankruptcy or have bad credit. These cards require a security deposit, collateral for your credit limit.
Q. How much credit should I use on my credit card after Bankruptcy?
A. It’s best to keep your credit utilization rate below 30% after Bankruptcy. This means you should only use 30% or less of your available credit limit each month.
Q. Are there any fees associated with credit cards after Bankruptcy?
A. Yes, some credit cards for people with bad credit or those who have filed for Bankruptcy may come with annual fees, application fees, or high-interest rates. It’s essential to read the fine print and understand all the credit card costs before applying.
Q. How can I rebuild my credit after Bankruptcy?
A. You are rebuilding your credit after Bankruptcy takes time and effort. Some steps include paying your bills on time, keeping your credit utilization rate low, and monitoring your credit report for errors or inaccuracies. Consider getting a secured credit card or a credit builder loan to help rebuild your credit.