Many credit card companies offer what some people call "bankruptcy credit cards." These are credit cards for people whose credit report shows that they have filed for bankruptcy.
These credit card companies target people with bad credit in general, not just those who have filed for bankruptcy. However, for the purpose of this article, we will use the term "bankruptcy credit card."
Most credit cards for people who have filed for bankruptcy that you see advertised are secured credit cards...
Many credit card companies offer what some people call "bankruptcy credit cards." These are credit cards for people whose credit report shows that they have filed for bankruptcy.
These credit card companies target people with bad credit in general, not just those who have filed for bankruptcy. However, for the purpose of this article, we will use the term "bankruptcy credit card."
Most of the credit cards for people with bankruptcy that you see ads for are secured credit cards. If you've never had a secured credit card before, it's "secured" by a special savings account you open with the bank that gives you the card. This account acts as collateral for the line of credit you get with the card.
So how do you choose a "secured" credit card after bankruptcy? First, you need to make a list of criteria. In After Bankruptcy Credit Solutions, I talk about eight things you can do to get credit again. When I use the eight criteria, there are only a few bankruptcy credit cards left. This makes it easy to find the best ones.
There isn't enough room here to talk about all eight of the things I look for in a bankruptcy credit card, so let's start with a few of them:
Has fees that are fair
What makes sense? Well, when I was looking into credit card companies that work with people who have filed for bankruptcy, I found one that charged a $120 application fee. Compared to some other programmes, this one has an application fee. But that's only part of the picture. You also need to make sure that the bankruptcy credit card issuer has a competitive interest rate with other issuers. This is why it's important to shop around and make sure you know about every fee the card issuer charges.
Sends a report to the major credit bureaus
This is very important if you want to rebuild your credit history. Make sure that the issuer of the bankruptcy credit card reports to the three major credit reporting agencies: Experian, Equifax, and Trans Union. You also need to make sure that the information is reported in a certain way. I talk more about this in After Bankruptcy Credit Solutions.
Tells about credit limits
Why does this matter? If the bankruptcy credit card issuer doesn't report your credit limit, some credit scoring models may automatically think you're at your limit, even if you're only using 10% of your available credit line. This could hurt your credit score.
Only three of the eight things I talk about in After Bankruptcy Credit Solutions have been talked about so far. But at the very least, it should give you a place to start when picking a credit card after bankruptcy.
