Top 5 Credit Cards for After Bankruptcy
The decision to file for bankruptcy is one that is met with much angst. However, the credit building process can begin once the case has been successfully discharged. You will find that your credit report will take a major hit, but thankfully, there are more than enough credit card companies that are willing to give you a second chance. They realize that to fix your credit you need their services. They also know that you cannot file bankruptcy again for another eight years.
While pre-paid credit cards are one option, you do not have to go that route. You can get an unsecured card and allow it to work for you.
Don’t Accept Every Card That Approves You
One trap that you should not fall into is taking every credit card that is offered to you. There are going to be some cards that you want to say no to. Stay away from cards that offer you a small credit limit with a huge processing fee. Some banks like First Premier Bank offer a $300 credit limit, however, they take away a processing and annual fee away immediately. This leaves customers with about $80 of available credit. If you ask for a joint card, then they will take an additional $20 too.
Be sure to make wise decisions regarding credit to ensure that you don’t end up in the same financial situation you just got out of. If you need to rebuild your credit, here are five credit cards that cater to those people fresh out of bankruptcy.
- Capitol One Bank
Capitol One Bank has numerous offerings for those who want a good credit card. They specifically have two cards that fit those with fair to bad credit. The Capitol One Platinum Card has a variable interest rate of 24.99 percent and no annual fee. Their Journey Student Master Card has a variable interest rate of 20.24 percent and no annual fee. However, one thing that many people do not know is they are a good option for those who have recently been discharged from bankruptcy. They will give you a credit limit anywhere from $300 to $3,000.
Another perk about building good credit with Capital One is their auto financing division. Keep your credit cards paid on time and they will offer you an auto loan. It always helps to go to the dealer with pre-approved loan paperwork in hand. While the interest rate may be a bit high, they will not charge huge annual fees or any processing that takes all the available credit.
- Credit One Bank
Credit One Bank will start you out with a lower credit limit, probably under $500, but they do review the account for automatic increases. They have one of the lowest annual fees, anywhere from $0 – $99, and they base the fee on your FICO Score. You need to have fair credit, so if you have a score in the 500’s, you will likely be approved. Check your credit profile before filling out an application for their card. Their variable interest rate is 15.65 percent – 24.15 percent.
To help those with troubled credit, they include a monthly score tracker in with their services. You can watch your score go up and down for free as a perk to being a member.
- Milestone® Gold MasterCard
As long as you are using your credit responsibly since the Bankruptcy, Milestone will help you out with a credit card. Their annual fee is $75 for the first year, and the price increases to $99 thereafter. All of their credit cards have a starting APR of 23.90 percent. While these are considered their prime offerings, the actual amount will be determined by your credit score. They allow you to choose a custom card design, use online service to pay bills and check account for free, and they have a 24/7 customer service department.
Their pre-qualification form allows you to see if you qualify before pulling your credit report. This saves your report from suffering a hit from a hard inquiry.
- Indigo® Platinum MasterCard
Indigo is not a company that is widely known, but their cards are accepted at over 35 million locations. Annual fees start as low as $0 and go up to $99 per year. APR rates start at 23.90 percent and increase per the credit score. They are funded through Genesis Bankcard Services, which also funds other credit cards for those with challenged credit. They have been around since 2001, and their headquarters is in Salt Lake City, Utah. They report to all three bureaus to help people rebuild their credit.
Credit limits start at $100 and go up to $5,000. They do have some stipulations on their cards, such as you cannot use them at the fuel pump for gas.
- Total VISA®
This Visa is issued by the Mid America Bank & Trust Company. While they don’t have any rewards programs or all the bells and whistles of other companies, they do offer fast approval. Now, with this account, you will need to pay a processing fee of $89 before the account will be opened. Fortunately, they will only charge you this amount if your account is approved. They do not bill to your credit card, you will be responsible for making the payment before a card will be released. They do require a checking account with automatic payment withdraw.
They work with people who have the worst credit, so if all others have said no, there is a good chance they will say yes. Their annual fee is $78 for the first year and then it drops to $48 thereafter. There is a monthly service fee of $6.25 billed as one lump charge of $75. The credit limit is $300 for everyone, and they will increase the limit as your credit score improves. Their APR is 29.99 percent for all card holders.
Pre-Paid Credit Cards
As you can see, there are some good options out there to help you rebuild your credit. Another option to consider is pre-paid credit cards. They are one of the hallmarks of credit building and there are numerous to choose from. Be careful of those that charge large fees for their services. There are plenty of cards out there that will let you use their services for next to nothing.
Rebuilding Your Credit
The rebuilding process is often difficult. When you do find the credit card to help you rebuild, make sure that you never spend more than 30 percent of your available credit. The goal is to let the card work for you. If you max out the credit card, it will be counterproductive in helping your credit score. Also, be sure to check your credit report from time to time to make sure things are on the upward swing.