How do I get a credit card after bankruptcy? One can apply for a credit card after your bankruptcy has been completed, or virtually discharged. Bankruptcy can wipe off your skate clean, relieve you from debt, and give you a chance to begin again.
You will start as soon as you are ready, to rebuild your credit card. Card issuers have different ways of approving credit cards for people with past bankruptcy. Getting a credit card after bankruptcy may not be as stressful as you think.
How Does Bankruptcy Affect Your Credit?
As you already know, you have a credit report that contains a history of your credit accounts. Bankruptcy will go on your credit report and will stay for up to 7 to 10 years, depending on the type of bankruptcy you filed.
If you had a high credit score when you filed for bankruptcy, your credit score may reduce by several hundred points once the bankruptcy hits your credit report. Your credit score may not file as much if you already had a low credit score before filing for bankruptcy. Creditors will pull your credit score when you make a credit card application, but that may not block you from getting a credit card.
Be Responsible when You’re Ready for a Credit Card
Before, you embark on the journey of applying for a new credit card, be sure you’re ready to bear the responsibility. You won’t be able to file bankruptcy again for several years, so if you get trapped in credit card debt again.
Therefore, making bankruptcy not an option for relief from debt. Ensure that you’ve corrected the situations that always run you into debt especially, bad spending habits. When you get a credit card, you need to be self-disciplined to spend within your credit card limit and Endeavor to pay your balance in full each month.
Do Not Expect Much
Do not expect your first post-bankruptcy credit card to have great terms. Credit cards with rewards and low-interest rates are reserved for consumers with excellent credit card scores. If you’re consistent in rebuilding your, you’ll qualify for these types of credit cards eventually, but you will have to prove your creditworthiness
However, you must avoid the cards you included in your bankruptcy. These credit card issuers are more likely going to deny your credit card application. Make sure the card you choose reports to at least one of the three major credit bureaus, if not the whole three. This is because you want your credit card usage to go on your credit report so that you can begin demonstrating good credit habits.
Types of Credit Cards to consider after Bankruptcy
A Secured Credit Card
It requires you to make a deposit against the Credit limit. After Bankruptcy, you’re likely to get approval for a Secured credit card. It is less risky for the credit card issuer. However, Some secured credit cards may not approve of you, if you had a bankruptcy discharge within the past year or two years. Read through the application criteria for any secured credit cards you’re considering. Ensure that you check if bankruptcy will hinder you from being approved.
Retail Credit Cards May Be Another Good Option
Retail Stores Credit Cards often have fewer restrictions on approval criteria for applicants. You may have the chance of approval. More likely you will be approved for a closed-loop retail credit card, which does not have a Visa or MasterCard logo and can only be used in the retail store.
Get to Know Which Credit Card to Avoid
The credit card offers to applicants who had been bankrupt of recently are high-interest rates and fees. Despite the fact that you do not qualify for upper cards, it does not mean you should settle for just any credit card that approves you.
Avoid credit cards with extremely high-interest rates or that have high charges upfront fees. These credit cards are not the best option for starting over after Bankruptcy. It puts you into debt before you even receive such a card in the mail. If you eventually put such cards as last resort, you have to pay off the fee before the card arrives in the mail. And you have to, pay your balance in full each month to avoid expensive interest charges.