Credit Cards After Bankruptcy – How to Get Approved

After filing bankruptcy and dealing with the aftermath of a discharge, you might swear off credit cards and stick to cash. But rather than let past mistakes dictate your future, face your demons and learn how to manage credit.

Credit cards aren’t your enemy. In fact, getting a credit card after bankruptcy is one of the easiest and fastest ways to improve your credit. With a high credit score you can purchase a home in about two years and qualify for a low interest rate.

But how do you get a credit card after bankruptcy? Surprisingly, it’s not as hard as you might think.

Pre-approved credit card offers

These offers aren’t only for people with an excellent credit history. Many banks offer credit cards to people with poor credit, and immediately after your discharge, you might receive several offers for unsecured bad credit credit cards. Granted, these types of credit cards don’t feature the most favorable terms and rates. But if you’re looking for a fresh start and a way to improve your low credit score, these types of credit cards can help.

Secured credit cards

An extremely high interest rate is a major disadvantage of unsecured bad credit credit cards. But there is another option. Skip the high rate and apply for a secured credit card. These types of credit cards are perfect after bankruptcy because approvals are practically guaranteed and they feature competitive interest rates. If you have a steady income source, you can get approved with no cosigner. And while this type of credit card requires a security deposit, the deposit can be as low as $250. With low interest rates and an affordable deposit, secured credit cards are a top choice if you’re looking to reestablish your credit after bankruptcy.

Find a cosigner

If you want a normal credit card that doesn’t feature a high interest rate or a security deposit, you’ll need a cosigner on the application. The cosigner is someone with a positive credit record who will take responsibility for the debt if you default. This person can be your parent, a sibling, your spouse or any other person you trust. The cosigning arrangement benefits your interest, but it’s a dangerous move for the other person. With this said, convincing someone to cosign a credit card application can prove challenging. In most cases, it’s easier to get a high-rate or a secured credit card.

Credit Card After Bankruptcy Tips

Regardless of the type of credit card you receive after bankruptcy, improving your credit habits is the only way to ensure an increase in credit scoring. Old habits, such as late payments and overspending, can resurface and cause further credit damage. Rather than apply for multiple credit cards, start off with one low-limit card. Only spend a small amount on this card each month and always pay the full balance by your due date. Stick with this routine and you will add positive history to your credit report every month and slowly fix damage caused by a bankruptcy.