Best Credit Cards To Obtain After Bankruptcy

After filing for bankruptcy, getting back on track with your credit can be challenging. However, obtaining a credit card and using it responsibly is one of the ways to start rebuilding your credit. Here are some types of credit cards that are generally considered good options for individuals post-bankruptcy, along with tips for using them wisely:

1. Secured Credit Cards:

• How They Work: These cards require a cash deposit that serves as your credit limit. This reduces the risk for the issuer, making them more willing to provide you with a card despite your bankruptcy history.
• Benefits: By making timely payments, you can build a positive payment history, which is crucial for improving your credit score.
• Example Options: Capital One Secured, Discover it® Secured, and the Secured Mastercard® from Citi are often recommended.

2. Credit Builder Cards:

• How They Work: These cards are specifically designed for individuals looking to build or rebuild their credit. They typically report to all three major credit bureaus.
• Benefits: Regular reporting to credit bureaus helps establish a good credit history, provided you pay on time and keep balances low.
• Example Options: Cards like the OpenSky® Secured Visa® Credit Card are often cited for their accessibility to individuals with poor or rebuilding credit.

3. Retail Credit Cards:

• How They Work: These are store-specific cards that are usually easier to qualify for than standard credit cards. However, they often come with higher interest rates.
• Benefits: Use these cards sparingly and pay off the balance each month to help rebuild your credit.
• Example Options: Consider retail cards from stores where you regularly shop, but be mindful of their terms and interest rates.

4. Subprime Credit Cards:

• How They Work: These cards are aimed at individuals with poor credit histories. They tend to have higher interest rates and fees.
• Benefits: They can offer an opportunity to rebuild credit when other options are limited, but they should be approached with caution due to their terms.
• Example Options: Cards like the Indigo® Platinum Mastercard® and the Credit One Bank® Unsecured Visa® for Rebuilding Credit are targeted at individuals with less-than-ideal credit.

Using Credit Cards Wisely Post-Bankruptcy:

• Low Balances: Try to keep your balances low compared to your credit limit to improve your credit utilization ratio, a key factor in your credit score.
• Full Payments: Always pay your bill on time and, if possible, in full each month to avoid interest charges and build a positive payment history.
• Monitor Credit: Regularly check your credit report and score to track your progress and ensure there are no inaccuracies.

While obtaining a credit card after bankruptcy can be a step toward rebuilding your credit, it’s crucial to manage it responsibly. Choose a card that suits your financial situation, be aware of the terms and fees, and use the card as a tool to demonstrate your creditworthiness by maintaining low balances and making timely payments.

Credit Cards After Bankruptcy