Best Credit Cards That Accept Bankruptcies
In today’s financial landscape, bankruptcy is not an uncommon term. It is a legal process designed to help individuals and businesses overcome insurmountable debt. However, navigating life after bankruptcy can be challenging, especially when rebuilding your credit.
One effective way to do so is by obtaining a Best Credit Cards That Accept Bankruptcies. In this article, we will explore what bankruptcy is, the concept of credit cards for bankruptcy, and delve into the top five best credit cards that accept bankruptcies.
What is Bankruptcy?
Bankruptcy is a legal proceeding that provides individuals and businesses overwhelmed by debt a fresh start. It involves a court process that may discharge debts or set up a repayment plan. Bankruptcy laws are designed to help individuals and businesses in financial distress by eliminating or restructuring their debts, giving them a chance to start anew.
What is a Credit Card for Bankruptcy?
Credit cards designed for individuals who have gone through bankruptcy are known as secured credit cards. Secured credit cards require a cash deposit as collateral, reducing the risk for the card issuer. These cards are an excellent tool for rebuilding credit since they typically report to credit bureaus, allowing users to demonstrate responsible financial behaviour.
Also, Read: Best Rewards Credit Cards Available for You
Top 5 Best Credit Cards That Accept Bankruptcies
Discover it Secured Credit Card
The Discover it Secured Credit Card is a popular choice for individuals looking to rebuild their credit. It functions as a secured credit card, requiring a security deposit that determines the credit limit. Discover is known for its customer-friendly approach and various benefits.
Key Features:
- Cashback Rewards: The Discover it Secured Credit Card offers a cashback rewards program, allowing cardholders to earn cash back on their purchases.
- Credit Limit Increase: With responsible use, cardholders may be eligible for a credit limit increase, and after a certain period, the card could transition to an unsecured card.
- No Annual Fee: This card has no annual fee, making it cost-effective for users.
Pros & Cons of Discover it Secured Credit Card
Pros:
- Cashback rewards program.
- Opportunity to transition to an unsecured card.
- No annual fee.
Cons:
- Requires a security deposit.
OpenSky Secured Visa Credit Card
The OpenSky Secured Visa Credit Card is known for its accessibility, as it doesn’t require a credit check for approval. It’s designed to help individuals establish or rebuild their credit by providing a straightforward and secure credit card option.
Key Features:
- No Credit Check: The OpenSky Secured Visa Credit Card does not require a credit check for approval, making it accessible for individuals with a low credit score or no credit history.
- Credit Reporting: It reports to all three major credit bureaus, contributing to improving the cardholder’s credit history.
- Adjustable Credit Limit: Users can adjust their credit limit by providing a higher security deposit.
Pros and Cons OpenSky Secured Visa Credit Card
Pros:
- No credit check for approval.
- Reports to all three major credit bureaus.
- Adjustable credit limit.
Cons:
- Annual fee.
Capital One Quicksilver Secured Cash Rewards Credit Card
The Capital One Quicksilver Secured Cash Rewards Credit Card is part of Capital One’s suite of credit-building products. It combines the benefits of cashback rewards with the security of a secured credit card.
Key Features
- Cashback Rewards: Cardholders earn cashback rewards on their purchases, providing a financial incentive for using the card responsibly.
- No Foreign Transaction Fees: This card is suitable for international use as it does not charge foreign transaction fees.
- Credit Limit Increase: Responsible use may lead to a potential credit limit increase.
Pros and Cons Capital One Quicksilver Secured Cash Rewards Credit Card
Pros:
- Cashback rewards.
- No foreign transaction fees.
- Potential credit limit increase.
Cons:
- Requires a security deposit.
Capital One Platinum Secured Credit Card
The Capital One Platinum Secured Credit Card is designed for individuals looking to rebuild or establish credit. It offers the benefits of a secured credit card, including credit reporting and the potential for a credit limit increase.
Key Features:
- No Annual Fee: This card does not have an annual fee, making it a cost-effective option for users.
- Credit Reporting: Capital One reports to major credit bureaus, allowing cardholders to improve their credit history.
- Potential Credit Limit Increase: Responsible card use may lead to an increase in the credit limit.
Pros and Cons Capital One Platinum Secured Credit Card
Pros:
- No annual fee.
- Reports to major credit bureaus.
- Potential credit limit increase.
Cons:
- Requires a security deposit.
First Progress Platinum Select Mastercard Secured Credit Card
The First Progress Platinum Select Mastercard Secured Credit Card is known for its accessibility, requiring no minimum credit score or credit history for approval. It is designed to help individuals rebuild their credit.
Key Features:
- Flexible Deposit Options: Users have flexibility in choosing their security deposit amount.
- Reports to Credit Bureaus: This card reports to all three major credit bureaus, aiding in improving the cardholder’s credit history.
- No Minimum Credit Score Requirement: It is accessible to individuals with no credit history or a low credit score.
Pros and Cons First Progress Platinum Select Mastercard Secured Credit Card
Pros:
- No credit history or minimum credit score is required.
- Reports to all three major credit bureaus.
- Flexible deposit options.
Cons:
- Annual fee.
Also, See: Best Low Interest and 0% APR Credit Card
How Do I Select the Best Credit Card After Bankruptcy?
Basic Eligibility
Consider cards with lenient eligibility criteria to increase your chances of approval.
Cost Factors
Evaluate annual fees, interest rates, and other associated costs to ensure they align with your budget.
Reporting to Credit Bureaus
Choose a card that reports your payment history to major credit bureaus, which is crucial for rebuilding credit.
Additional Considerations
Look for features like cashback rewards, credit limit flexibility, and possibly transitioning to an unsecured card.
Also, Read: What Is a Co-Branded Credit Card?
Should You Get a Credit Card After Bankruptcy?
If approached responsibly, getting a credit card after bankruptcy can be a strategic move. It provides an opportunity to rebuild credit, essential for future financial endeavours such as securing loans or mortgages.
How Does Bankruptcy Affect Your Credit?
Bankruptcy has a significant negative impact on your credit score. It may stay on your credit report for several years, making it challenging to obtain credit. However, responsible use of a secured credit card can gradually improve your creditworthiness.
How to Rebuild Your Credit After Bankruptcy?
Rebuilding credit after bankruptcy requires a systematic approach. Paying bills on time, managing your credit utilization ratio, and avoiding new debt are key strategies. A credit card designed for bankruptcy can be a valuable tool.
How to Use a Credit Card After Bankruptcy?
Use your credit card responsibly by making timely payments, keeping your balances low, and avoiding unnecessary debt. These actions will contribute to a positive credit history and improve your credit score.
Read More: How Do Credit Card Refunds Work
How Did We Choose These Credit Cards?
These credit cards were selected based on factors such as ease of approval, cost-effectiveness, reporting to credit bureaus, and additional features that support credit rebuilding. Extensive research and consideration of user reviews and experiences were also considered to ensure the recommendations are practical and beneficial for those rebuilding their credit post-bankruptcy.
FAQs
Can I get a credit card after bankruptcy?
Yes, you can. Secured credit cards are specifically designed for individuals with a bankruptcy history. These cards require a security deposit, reducing the risk for the issuer and providing a viable option for rebuilding credit.
How do secured credit cards work?
Secured credit cards work by requiring users to make a cash deposit as collateral, usually equal to the card’s credit limit. This deposit minimizes the risk for the card issuer and allows individuals with a bankruptcy history to demonstrate responsible credit behaviour.
Will using a secured credit card improve my credit score?
Yes, if used responsibly. Secured credit cards typically report your payment history to major credit bureaus. Making timely payments and managing your credit responsibly can positively impact your credit score over time.
How long does bankruptcy stay on my credit report?
The impact of bankruptcy on your credit report depends on the type of bankruptcy filed. Chapter 7 bankruptcies may remain on your credit report for up to 10 years, while Chapter 13 bankruptcies may stay for up to 7 years.
Conclusion
Choosing the right credit card after bankruptcy is crucial to rebuilding your financial health. By selecting a card that aligns with your needs and using it responsibly, you can gradually restore your creditworthiness and pave the way for a more secure financial future.
