After declaring bankruptcy, you must start the process of rebuilding your credit. But when should you submit a new credit application? You can apply for a secured credit card once your bankruptcy is dismissed, therefore it depends on the bankruptcy form you filed. It can take just six months or it might take five years.
For the majority of customers, chapter 7 and chapter 13 bankruptcy are the two options. With a few notable exceptions, like student loans, unpaid child support, and IRS debt, Chapter 7 will remove the majority of debt with no repayment necessary. As Chapter 13 is a debt restructuring programme (wage-earner plan), this type requires some payback over time depending on your disposable income and the amount of debt you have. Let’s understand how secured credit cards can be your ally in building credit.
How Does Bankruptcy Affect Your Credit?
Bankruptcy is a trade-off as it eliminates or lowers debt that you are unable to pay, but it also makes you appear less creditworthy to others. Your credit score is affected, which might drop significantly and make it difficult for you to borrow money and make purchases. It may be extremely challenging to obtain a credit card, a personal loan from a bank, or a mortgage in the near future, and it may take years for the bankruptcy's effects to fade.
Even though it is difficult, it is not impossible to obtain credit after bankruptcy. Your credit report will cost you more to borrow money if bankruptcy is indicated there. However, since all of your debt will be discharged in bankruptcy, you should be able to start over by getting a secured credit card after bankruptcy to build your credit.
Best Secured Credit Cards to Build Credit After Bankruptcy
Getting a secured credit card after bankruptcy is a crucial step in restoring your credit after filing for bankruptcy. The best secured credit cards after bankruptcy are simple to obtain with minimal fees, and send monthly activity reports to the three main credit bureaus. Consumers who have filed for bankruptcy have access to a wide variety of credit cards, but it can be difficult to find suitable options without paying a fortune in fees. To identify the best options, we compared post-bankruptcy secured credit card options. Here is the list of best secured credit cards after bankruptcy:
- Zolve Azpire Credit Builder Card
- Discover it® Secured Credit Card
- Capital One Platinum Secured Credit Card
- OpenSky® Secured Visa® Credit Card
- Capital One Quicksilver Secured Cash Rewards Credit Card
Let’s dive into details about the best secured credit card for bankruptcies:
Zolve Azpire Credit Builder Card
Zolve Azpire Credit Builder Card is the best secured credit card for bankruptcies. It is a secured card with no minimum deposit needed; and your deposit becomes the credit limit. If you fully pay off your credit card amount and end the account, deposits are refunded. You can apply for this secured credit card easily in 5 minutes and start using it as a rebuilding credit card after bankruptcy.
Added benefits include:
- No yearly charge
- No credit check
- No minimum deposit required
- Credit activity reported to three major credit bureaus
- Ability to apply for pre-approval
Discover it® Secured Credit Card
2% cash back at gas stations and restaurants is available on up to $1,000 in combined purchases per quarter. The Discover it® Secured Credit Card is one of the credit cards to build credit after bankruptcy because it offers 1% unlimited cash back on all other transactions. In addition to giving you a free copy of your FICO Credit Score each month so you can monitor your progress in repairing your credit, this program will double your cash back at the conclusion of your first year.
Capital One Platinum Secured Credit Card
Due to its strong benefits and lack of annual fees, the Capital One Quicksilver Secured Cash Rewards Credit Card is among the top secured cards overall. In most cases, having a bankruptcy on your record does not prevent you from being authorized. The only bankruptcy-related prerequisite for this card is that your case must be concluded. With the Capital One Quicksilver Secured card, you'll have an excellent chance of starting the rebuilding phase once the bankruptcy procedure is over.
OpenSky® Secured Visa® Credit Card
The OpenSky® Secured Visa® Credit Card is the finest credit card after bankruptcy because it's simple to apply for and doesn't require a credit check. Your income needs to be more than your expenses in order for the OpenSky Card to be approved. The OpenSky® Secured Visa® has a $35 annual fee and a $200 minimum security deposit, so it's not overly pricey either. This deposit is 100% refundable, and it will prevent you from overspending while you work to improve your credit.
Capital One Quicksilver Secured Cash Rewards Credit Card
When you apply for Capital One Quicksilver, no hard query is made on your credit record. Additionally, there is no required credit score. You only need to fund your $200 refundable security deposit post your identity confirmation and residence. Since only that is required to be authorised for this card, having a bankruptcy on your credit report won't prevent you from applying as long as the case has been dismissed.
Do not become frightened if you have declared bankruptcy. You can use secured credit cards for building credit after bankruptcy to gradually rebuild a strong credit position. When you're prepared to begin applying for credit cards, look for pre-approval offers so you can determine whether you have a good chance of being accepted. Before submitting a formal application, make sure to read the card's terms and restrictions. Pay attention to fees, minimum deposits, whether or not the issuer sends activity to credit bureaus, and how long it takes to become eligible for a better card, one wiser choice can be the Zolve Azpire Credit Builder Card. Most essential, practice patience because good credit doesn't just appear.
Frequently Asked Questions
Should I get credit cards for building credit after bankruptcy?
Yes, you should get a secured credit card for building credit after bankruptcy. Making prompt credit card payments is one of the best strategies to repair the damage bankruptcy might have made to your credit score. However, before applying for a secured card after bankruptcy, think about how you got into debt and if you can responsibly handle a new credit account. This time with consistent good financial habits, rebuild your credit.
Can I apply for a best secured card after bankruptcy prior to the discharge of my bankruptcy?
Technically, you are welcome to apply whenever you like. Before your bankruptcy is discharged, it's doubtful that you would be approved for most cards, and each check could lower your credit score.
How soon after filing for Chapter 7 Bankruptcy can I apply for credit?
After filing for Chapter 7, you can normally apply for a credit card three months later.
How soon after filing for Chapter 13 Bankruptcy can I apply for credit?
After filing for Chapter 13, you can typically apply for a credit card three to five years later.
Can I apply for a Zolve Azpire Credit Builder card after declaring bankruptcy?
Absolutely, once your bankruptcy is discharged you can apply for Zolve secured credit card in less than 5 minutes. With the benefits of zero interest rate and no required minimum deposit, you can start rebuilding your credit.