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Wednesday, October 20, 2021

10 Best Credit Cards After Bankruptcy Discharge – (Rebuild Credit)

Credit Cards After Bankruptcy

credit card advice

Sean Garrity
By: Sean Garrity
Updated: March 4, 2020
Advertiser Disclosure

While no one likes to admit defeat, sometimes our debts simply get the better of us and bankruptcy may become the only option for a better financial future. Unfortunately, your credit will see lasting negative impacts from a bankruptcy, but you can repair your credit with some hard work — and a lot of patience.

One of the first steps you should take after your bankruptcy is complete is to check all three of your credit reports. Make sure all of the accounts that were affected by the bankruptcy accurately reflect their new status, or have been properly removed.

The next step is to start rebuilding your credit. A big bankruptcy myth is that you will only be able to qualify for a secured credit card after bankruptcy, but that’s not always true in today’s credit market. Some lenders, particularly subprime lenders, will consider post-bankruptcy applicants for unsecured cards. So, when it comes to obtaining credit cards after bankruptcy, the options may not be as narrow as many people believe. Begin your search with our expert-rated picks below, which includes unsecured and secured card options.

Unsecured Cards (4) | Secured Cards (6) | Bankruptcy Basics

Top 4 Unsecured Credit Cards to Apply for After Bankruptcy

The major reason many prefer unsecured credit cards to secured cards is, really, the major difference between the two: the deposit. A secured credit card is secured by the deposit you put down, and, in most cases, that deposit will set your credit limit. An unsecured card requires no deposit but may have more stringent requirements.

Fingerhut Credit Account Review

at Fingerhut'ssecure website

  • Easy application! Get a credit decision in seconds.
  • Build your credit history – Fingerhut reports to all 3 major credit bureaus
  • Use your line of credit to shop thousands of items from great brands like Samsung, KitchenAid, and DeWalt
  • Not an access card
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
See Issuers Website
$0
Poor Credit

2. Credit One Bank® Visa® with Free Credit Score Access

This card is currently not available.

Bad Credit Rating

★★★★★
N/A

OVERALL RATING

N/A
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
N/A
N/A
N/A

3. Credit One Bank® Unsecured Visa® with Cash Back Rewards

This card is currently not available.

Bad Credit Rating

★★★★★
N/A

OVERALL RATING

N/A
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
N/A
N/A
N/A

4. Credit One Bank® Platinum Visa® for Rebuilding Credit

This card is currently not available.

Bad Credit Rating

★★★★★
N/A

OVERALL RATING

N/A
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
N/A
N/A
N/A

+See More Unsecured Credit Cards

One good way to see if you may qualify for a particular card before going through a hard credit pull is to check for pre-qualification offers. Most issuers offer a pre-qualification process that usually involves a soft credit pull and won’t affect your credit score.

While being pre-qualified for a specific credit card won’t guarantee you’ll be accepted if you apply, not being pre-qualified can be a sign that you may not meet the card’s requirements and should consider waiting before you apply.

6 Best Secured Credit Cards for Post-Bankruptcy Bad Credit

If you don’t qualify for an unsecured credit card or prefer setting your own credit limit through a deposit, secured credit cards are a great option. Because the card is secured by your deposit, there is less risk to the issuer should you become unable to repay your balance. As a result, secured credit cards tend to have very flexible credit requirements, meaning almost anyone can qualify for a secured card.

SECURED RATING

★★★★★
4.7

OVERALL RATING

4.0/5.0
  • No annual or hidden fees. See if you're approved in seconds
  • Building your credit? Using the Capital One Platinum Secured card responsibly could help
  • Put down a refundable security deposit starting at $49 to get a $200 initial credit line
  • You could earn back your security deposit as a statement credit when you use your card responsibly, like making payments on time
  • Be automatically considered for a higher credit line in as little as 6 months with no additional deposit needed
  • Enjoy peace of mind with $0 Fraud Liability so that you won't be responsible for unauthorized charges
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
26.99% (Variable)
$0
Limited, Bad
OpenSky® Secured Visa® Credit Card Review

at Capital Bank'ssecure website

SECURED RATING

★★★★★
4.7

OVERALL RATING

3.2/5.0
  • No credit check necessary to apply. OpenSky believes in giving an opportunity to everyone.
  • The refundable* deposit you provide becomes your credit line limit on your Visa card. Choose it yourself, from as low as $200.
  • Build credit quickly. OpenSky reports to all 3 major credit bureaus.
  • 99% of our customers who started without a credit score earned a credit score record with the credit bureaus in as little as 6 months.
  • We have a Facebook community of people just like you; there is a forum for shared experiences, and insights from others on our Facebook Fan page. (Search “OpenSky Card” in Facebook.)
  • OpenSky provides credit tips and a dedicated credit education page on our website to support you along the way.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
17.39% (variable)
$35
Poor
Applied Bank® Secured Visa® Gold Preferred® Credit Card Review

at the issuer'ssecure website

SECURED RATING

★★★★★
4.6

OVERALL RATING

4.0/5.0
  • Better than Prepaid...Go with a Secured Card! Load One Time - Keep On Using
  • Absolutely No Credit Check or Minimum Credit Score Required
  • Automatic Reporting to All Three National Credit Bureaus
  • 9.99% Low Fixed APR - Your Rate Won’t Go Up Even if You Are Late
  • Activate Today with a $200 Minimum Deposit - Maximum $1,000.
  • Increase Your Credit Limit up to $5,000 by Adding Additional Deposits Anytime
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
9.99% Fixed
$48
Poor/Fair/Limited/Damaged
Bank of America® Customized Cash Rewards Secured Credit Card Review

at the issuer'ssecure website

SECURED RATING

★★★★★
4.6

OVERALL RATING

4.0/5.0
  • Earn 3% cash back in the category of your choice: gas, online shopping, dining, travel, drug stores, or home improvement/furnishings and 2% cash back at grocery stores and wholesale clubs on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then earn 1%
  • Unlimited 1% cash back on all other purchases
  • A minimum refundable security deposit of $300 (maximum of $4,900) is required to open this account
  • Access your FICO® Score updated monthly for free, within your Mobile Banking app or in Online Banking
  • Optional overdraft protection option helps prevent declined purchases, returned checks or other overdrafts when you link your eligible Bank of America® checking account to your credit card. Transfer fees may apply.
  • $0 annual fee
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
23.99% Variable
$0
Bad/Limited
Citi® Secured Mastercard® Review

at the issuer'ssecure website

SECURED RATING

★★★★★
4.5

OVERALL RATING

4.4/5.0
  • The Citi® Secured Mastercard® is a no annual fee credit card that helps you build your credit when used responsibly
  • Unlike a debit card, it helps build your credit history with monthly reporting to all 3 major credit bureaus. Once available, you will also have free access to your FICO score online.
  • Use your card anywhere Mastercard® is accepted — worldwide
  • A security deposit is required. Once approved, your credit limit will be equal to your security deposit (minimum of $200).
  • Get help staying on track with Auto Pay and account alerts
  • With Flexible Payment Due Dates, you can choose any available due date in the beginning, middle or end of the month
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
22.49% Variable
$0
Limited History, No Credit, New-to-Credit
nRewards® Secured Credit Card Review

at the issuer'ssecure website

SECURED RATING

★★★★★
4.5

OVERALL RATING

4.1/5.0
  • Earn 1X points per dollar spent
  • The Navy Federal nRewards Secured credit card lets you earn rewards while building your credit
  • No annual fees, no balance transfer fees, no foreign transaction fees, and no cash advance fees
  • Deposit at least $200 into your membership savings account (before submitting your application) to back your spending. Once approved, we’ll hold your deposit in your account as your card’s credit limit.
  • After just 3 months, you could be eligible for an upgrade. If you qualify, we’ll provide you with additional credit to allow for spending beyond your deposit. Then, at 6 months, we’ll review your account monthly to see if you’re eligible to have your hold removed and be upgraded to a cashRewards unsecured card.
  • Must be a member of Navy Federal Credit Union to qualify
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
18.00%
$0
None/Poor

+See More Secured Credit Cards

One of the reasons secured credit cards can be preferable to unsecured cards is the ability to obtain a much higher credit limit. Unsecured cards for poor credit tend to cap limits in the low hundreds of dollars, while some secured cards offer the ability to obtain a credit limit as high as $5,000 so long as you can make a deposit of that amount.

A high credit limit can be very helpful for your credit score, especially if you tend to make large or frequent purchases. That’s because your utilization rate, or the ratio of available credit to debt, can be worth up to 30% of your FICO credit score. A higher credit limit can help you maintain a lower utilization rate, which is better for your credit score.

Bankruptcy Basics

Bankruptcy is a last-ditch option for those overwhelmed by debt. The actual financial effects of bankruptcy proceedings depend on the type of bankruptcy declared, but can include debt forgiveness or moderated repayment. For individuals, the most common types of bankruptcy are Chapter 7 and Chapter 13.

Regardless of which type of bankruptcy you declare, be prepared to face credit damage. Furthermore, a bankruptcy discharge can live on your credit report for seven to 10 years from the filing date (depending on whether you file Chapter 13 or Chapter 7 bankruptcy, respectively).

Obtaining a Bankruptcy Discharge

A bankruptcy discharge is the goal of the bankruptcy process and is the actual legal order that says you are no longer obligated to pay any discharged debts. Once discharged, creditors holding a debt may no longer attempt to collect on that debt, either by mail, phone, or in person.

Each debt being considered for discharge has a fixed time during which a complaint objecting to the discharge may be filed. If there is no litigation objecting to the discharge, debtors will generally receive a discharge automatically.

Chapter 7 vs. Chapter 13 Bankruptcy

For the most part, the difference between Chapter 7 bankruptcy and Chapter 13 bankruptcy is a matter of scope and qualification. Under Chapter 7 bankruptcy, many of your unsecured debts can be completely wiped out, including credit card debt and medical bills. When you file for Chapter 13 bankruptcy, you’ll be required to pay back some portion of your existing debt.

Since Chapter 13 bankruptcy involves paying off your debts over time, you won’t receive a final discharge until all payments have been made under the plan, which can take between three and five years. In contrast, Chapter 7 is much faster, with complete discharge typically being reached within six months.

All that being said, not all debtors can qualify for Chapter 7. If you make too much money and/or have too much disposable income, you may not be able to file Chapter 7. Additionally, if you want to maintain ownership of any property or other collateral used for a secured debt, including real estate and automobiles, you should choose Chapter 13 bankruptcy.

Rebuilding Your Credit After Bankruptcy

Though your debts may have gotten the better of you, recovering from a bankruptcy is possible. No matter which road you take through the bankruptcy process, the key to rebuilding your credit afterward is patience. While you typically won’t need to wait the full seven to 10 years for your credit score to rebound, you likely won’t see a 700+ score for at least a couple of years after your bankruptcy is complete.

Rebuilding your credit will require you to demonstrate healthy financial habits, including the ability to maintain credit accounts — in good standing — over a period of time. Don’t apply for a dozen credit cards hoping to boost your credit quickly — this will backfire. Stick to one or two cards, use your credit modestly, and pay off any debts in full each month. If you are diligent, you will be able to see your credit improve over time.

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