Which Credit Cards Are Easiest To Get After Bankruptcy?
by JennaWe get a lot of readers who ask, or comment about getting credit cards after their bankruptcy. I thought it might be helpful to take a look at some of their experiences, as well as my own experience getting credit after bankruptcy.
The best way to know which types of credit you can apply for after bankruptcy is to check your credit score. If your score is 600 or below, you will need to apply for a secured credit card, or a “bad credit” credit card.
Secured vs. Unsecured Credit Cards
Secured credit cards require you to deposit money in a savings account in case you default on the balance. They eventually revert to unsecured credit cards and you get your initial deposit back. Or, if you default on the loan, then the deposit is used to cover your balance, and you can walk away without the card hurting your credit too badly.
All in all, secured credit cards are by far your best bet, and I speak from experience. After my own bankruptcy I got one secured credit card, and one bad credit, unsecured credit card. The secured card had a much better rate of interest, lower fees, and I will get my deposit back.
The unsecured credit card had a high interest rate, monthly fees, and about $250 worth of fees charged to the card initially. The initial fees forced me to pay the balance down immediately so that it didn’t lower my credit score.
Credit cards for improving credit:
Some folks are able to get normal credit cards almost right out of bankruptcy too. A reader, Joseph , sent me the letter below about his experience after bankruptcy. He was approved for a Platinum Capital One Card 8 months after his bankruptcy. When I asked him what he did to repair his credit he replied:
The only thing I did was get a WaMu secured card after my bankruptcy (filed 1/25, discharged 5/01) in July of last year. It got canceled in January due to Chase’s decision. I tried to apply at BoA for a secured card, but they denied me because it wasn’t one year since the discharge, which was on 5/01.
Other than that, I did nothing to repair my score…I applied for a capital one card the other evening and instantly got approved. I don’t know all the details of the credit limit, but it was for a platinum card at 22%.
However I keep no balances anymore, so that doesn’t matter!
I was so excited to hear this from Joseph, because it does give hope to those of us in the process of repairing our credit after bankruptcy. I should point out though, that Joseph is doing everything the right way – he applied for a secured credit card right after bankruptcy and made regular payments. He also makes a point not to carry a balance on his credit cards, which is the single biggest thing you can do to help your credit score aside from making on-time payments.
We also had another reader, Patricia, who left this comment:
There are several places that will give you credit, but use it wisely. I filed bankruptcy 4/30/08 discharged 8/27/08 (will never forget that day). Recently got the nerve to apply for a credit card in April was approved through Capital One. I spent $11 and paid it off before I got my first statement (4/11/09). Target is also known to be bankruptcy friendly but if you are not a target shopper I wouldn’t get one. Anyway my advice is be patient and things will come to you.
So, it’s looking like Capital One is a good place to apply for credit once you have repaired your credit score a bit.
As for my own experience, right out of Bankruptcy I applied (and got) a secured credit card from Orchard Bank, an unsecured credit card from Indigo Bank (used to be a different company and I can’t remember the name now – but it’s currently Indigo Bank).
About a year after my bankruptcy I got a Target card as well.
So, please don’t worry that you won’t be able to get credit after bankruptcy. You definitely can. You may have to put down a deposit, or pay high interest rates for a while. I just chalk it up as the price for my past mistakes, and work towards qualifying for better terms. It can be done, and easily!
How about you? Do you have a credit repair story? Which cards did you use to raise your credit score? Please leave a comment below!
Keep Reading:
- What are secured credit cards?
- Bad Credit Credit Cards for People with Bad Credit
- What credit card should you get when your credit has been steadily improving?
April 17th, 2009 at 06:13
[...] Ask Mr. Credit Card asks which credit cards are easiest to get after bankruptcy? [...]
August 2nd, 2009 at 15:46
As someone said, Capital One unsecured credit card is very easy to get. They came to me with an offer shortly after my BK discharged. Also try Orchard Bank. I was just approved for their unsecured card. If you’re aiming for a home mortgage, you need 3-5 lines of credit, so it’s important to persevere. I was also advised by mortgage brokers that multiple credit checks are best done within a 2-week period, so at to have a minimal impact on your score. So apply for a couple at a time. If you’re approved for one, wait at least a month to get another one.
August 31st, 2009 at 15:33
Wanted to say “thanks” for giving me the extra little boost of confidence I needed to go ahead and apply for a credit card. After filing bankruptcy about 1.5 years ago (discharged 2/2/09) I knew it was going to be necessary for my husband and I to get back into the “credit” game.
Unfortunately, hubby wasn’t quite as discerning as I tend to be and signed up to get a credit card through First Premier bank. BAD CHOICE and my advice is to stay away at all cost. They charge a fee for everything and make it nearly impossible for someone on a tight budget to get ahead at all. Before my husband even had the card in hand his balance was jacked up to $149 (nearly half of the credit limit they had given him).
I was seriously considering getting a secured card as I figured it’d be the only thing I’d qualify for outside of something atrocious from First Premier. My husband and I both make a respectable salary and have always maintained our mortgage and automobile payments to the utmost but with five children, one could say we live on a pretty tight budget. While I do have some money sitting in a savings account that I was considering using for a secured credit card, I was reluctant because I’d rather have that as a cushion for us if we get into a tight spot.
I applied for a card with Orchard Bank and was instantly approved for their platinum card with a respectable interest rate and a small processing fee.
October 1st, 2009 at 13:47
I filed in November 08′ and received Orchard Card in February before discharged. I too fell for First Premier, but cancelled it as soon as it arrived and required that they send me a letter stating 0 balance.
My bankruptcy was discharged in July and I am looking toward getting 1-2 other cards. I found this blog by searching Target Card after Bankruptcy…because it is a card I would use and pay off each month, because my husband and I shop there frequently. (I filed as a single person due to business closure)
Thanks for sharing the info!