After A Bankruptcy, Can I Apply For Credit Cards

Dec 31, 2022 By Triston Martin

Filing for bankruptcy is frequently viewed as a "worst-case scenario," as it can have far-reaching consequences for your money and credit. Yet this is not the end of the world. Applying for a credit card for persons with weak or terrible credit is a great way to start over after bankruptcy. Rebuilding your credit score takes time, but it can be done with smart spending and on-time payments.

Applying for a New Card Requires Discharge of a Bankruptcy

While your bankruptcy is pending, you cannot apply for any new credit, including a credit card. When you are eligible to apply for a credit card again depends on how long your bankruptcy case can be resolved and closed.

After four to six months, your obligations will be dismissed after filing for Chapter 7 bankruptcy. Once you've done that, you may start the credit card application process.

However, Chapter 13 bankruptcy, which involves debt repayment over three to five years, can be more time-consuming. If you file for bankruptcy, you will be released once all payments are complete. You need the court's permission before you can proceed.

Qualification for Credit Cards

Chapter 7 bankruptcy will remain on your credit report for ten years after filing. It takes ten years for a Chapter 7 bankruptcy to fall off your credit report and up to 7 years for a Chapter 13 bankruptcy.

If your credit score is less than perfect, using a credit card responsibly might help you improve it. It's frustrating since you could not be eligible for many credit cards, including ones with valuable rewards and deluxe amenities, even if you are approved. Applying for a credit card specifically for poor credit is always a good idea.

Once a Credit Card Is Obtained

Even after you've been issued a credit card, your efforts to enhance your credit score should continue. A higher credit score can open doors to better credit cards and lower interest rates on other loans, including auto, home, and education financing.

Applying For Credit Cards After Filing for Bankruptcy

Bankruptcy survivors might still have access to credit. Each option includes advantages and disadvantages that should be weighed thoroughly before making a final decision. Get pre-approval before applying.

Note that credit cards geared at persons with weak credit tend to have higher APRs than those directed at those with strong credit. You can avoid incurring interest if you use your credit card wisely and pay your debt in full every month.

Prepaid Secured Credit Card from Discover it

If you've recently emerged from bankruptcy and want to restore your credit, consider applying for a Discover it® Secured Credit Card. To open an account, you must first deposit at least $200, which is your secured credit card's credit limit. If you pay off your credit card debt in full and cancel your account, your deposit will be returned to you.

Secured Platinum Credit Card from Capital One

Anyone with a history of defaulting on loans can apply for the Capital One Platinum Secured card, as it is marketed at a "rebuilding credit" level. The Platinum Secured Card works the same way as other secured credit cards in that a deposit is needed to open a credit line. However, depending on the conditions of your deal, a modest deposit of $49, $99, or $200 is required to qualify for a $200 credit line.

The OpenSky Visa Secured Credit Card

OpenSky, a credit card issuer owned by Capital Bank, provides a secured credit card for which you may be eligible despite your less-than-perfect credit history. If you're interested in applying for an OpenSky Secured Credit Visa card, know that your credit history won't play a role in the decision.

A minimum refundable deposit of $200 is required to open the account. However, the Visa card may be used for any transaction, regardless of whether or not it's a qualifying purchase, so there's that. Unfortunately, there is a $35 annual fee associated with this card.

Conclusion

Don't freak out if you've just declared bankruptcy. Secured and unsecured credit cards might help you rebuild your credit history. When you're ready to apply for a credit card, it's a good idea to see whether you've been pre-approved.

Before applying for any credit card, you must understand the associated terms and conditions. Watch out for things like annual fees, minimum deposits, whether or not the issuer shares your activity with credit bureaus, and how long it takes to get an upgrade. It's vital to remember that excellent credit doesn't appear magically.

More Articles
blownions
Copyright 2019 - 2023