Your ability to obtain a credit card is one of the numerous negative consequences of chapter 13 bankruptcy. Although it's not impossible, getting a credit card after chapter 13 bankruptcy may be challenging because of the long-term harm bankruptcy brings to your credit score. One of the ways to rehabilitate those who are getting over bankruptcy is by signing up as an authorized user on someone else's account or getting a secured credit card in your own name.
In this article, you'll find a list of the best credit cards after chapter 13 bankruptcy. These cards provide rewards and flexible deposit possibilities. Let’s explore all details of the best credit cards after chapter 13 bankruptcy.
What is Chapter 13 Bankruptcy?
Chapter 13 refers to a bankruptcy case in the United States when debtors reorganise their finances under the court's oversight and consent. Individuals and married couples may apply for Chapter 13 bankruptcy, even if they are self-employed or running an unincorporated business.
Debtors must submit and carry out a plan to pay off outstanding creditors within three to five years as part of a Chapter 13 reorganization, also known as a wage earner's plan. Most of the time, the repayment plan must give creditors a sizable payback—at least as much as they would receive under other types of bankruptcy—and, if necessary, it must employ the whole debtor's disposable income for repayment.
How does Chapter 13 Bankruptcy Impact Your Credit Score?
A Chapter 13 bankruptcy petition can put you on the path to financial recovery more quickly than a Chapter 7 filing, even if it may not directly benefit your credit score. Negative information like missed payments, charge-offs, and judgments typically lasts for up to seven years on your credit report. A Chapter 13 case can be on your credit report for up to seven years, but the period of time begins to run once your case is filed. A Chapter 13 bankruptcy will disappear from your credit reports two to four years after you receive your discharge, depending on how long your plan was in effect.
In order to restore your credit after bankruptcy, you should try to use credit cards less frequently. However, using secured credit cards wisely might also assist you in starting to rebuild your credibility with lenders.
What is a Secured Credit Card?
A credit card is referred to as "secured" if a deposit has to be placed with the credit card company in order to start an account.
Making a refundable security deposit is necessary to apply for a secured credit card, which must subsequently be used to secure loans. Even though these cards typically have high-interest rates, if they are reported to all three credit agencies, they are an excellent way to demonstrate responsible credit conduct until you are more qualified for a standard card with more favorable terms.
3 Best Credit Cards To Rebuild Credit After Chapter 13 Bankruptcy
Those who are getting over bankruptcy still have options, such as signing up as an authorized user on someone else's account or getting a secured credit card in your own name.
Below, you'll find a list of the best credit cards after chapter 13 bankruptcy on their credit histories. These cards provide minimal to no annual fees, flexible deposit options, and incentives for purchases.
- Zolve Azpire Credit Builder Card
- Discover it® Secured Credit Card
- Capital One Platinum Secured Credit Card
Let’s explore the details of the best credit cards after chapter 13 discharge:
Zolve Azpire Credit Builder Card
Zolve secured credit card is one of the best credit cards after chapter 13 bankruptcy as this card has no annual fee and flexible terms in addition to a number of benefits. Additionally, there is no required credit score. You only need to confirm your identity and residence. Since only that is required to be authorized for this card, having a bankruptcy on your credit report won't prevent you from applying as long as the case has been dismissed. With Azpire, you can establish credit using your own funds and at your own pace. Here is the list of benefits:
- No monthly fees
- No interest
- No SSN is necessary to apply
- Cashback of up to 15%
- No credit checks
- No minimum balance
Discover it® Secured Credit Card
One of the best credit cards after chapter 13 bankruptcy is the Discover it® Secured Credit Card. 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 programme will double your cash back at the conclusion of your first year. Discover will monitor your account.
Capital One Platinum Secured Credit Card
Users of the Capital One Platinum Secured Credit Card can deposit $49, $99, or $200 as a refundable security deposit to be eligible for a credit limit that begins at $200. You can have access to a greater credit limit once you've made six timely payments in a row. Make sure your bankruptcy file is discharged before applying for the card because Capital One won't accept applications from those with outstanding bankruptcies.
Following bankruptcy, it could take some time to repair your credit. But you may start the process with the best secured credit cards like Zolve Azpire Credit Builder Card and financial knowledge, and with enough favorable information added to your credit history over an extended enough period of time, your credit scores should start to increase along with your credit rating.
Frequently Asked Questions
How long does it take for a Chapter 13 bankruptcy to improve one's credit score?
A Chapter 13 bankruptcy appears on a consumer's credit report for seven years, as opposed to ten years for a Chapter 7 bankruptcy. However, once your Chapter 13 bankruptcy has been discharged, it typically takes between 12 and 18 months for your credit score to start rising.
Can I get a secured credit card after Chapter 13?
When your bankruptcy is discharged if you filed for Chapter 13 bankruptcy, you ought to be eligible to obtain a secured credit card. You can get the Zolve Azpire Credit Builder Card after chapter 13 bankruptcy and can start rebuilding your credit.
How can my credit score improve after Chapter 13 bankruptcy?
When calculating your ratings, credit scoring organizations take a number of things into account:
your credit history's length, the amount of new credit you've asked for, and your payment history (including if you have filed for bankruptcy or paid bills late). By completing all of your payments on schedule after filing for bankruptcy, you can begin to repair your credit. Reduce your debt, especially when compared to the credit you have access to. Get the best secured credit card in chapter 13 whenever you're ready, make a few minor purchases with it, and then pay the balance in full each month.
When will a Chapter 13 bankruptcy be taken off a person's credit report?
Chapter 13 bankruptcy will disappear from your report seven years after the filing.
After filing for Chapter 13 bankruptcy, can I get the Zolve Credit Builder Card?
There are no guarantees, but it's possible to be approved for the Zolve Azpire Credit Builder Card after filing for bankruptcy in chapter 13.
