Bankruptcy can help you reset your financial future. After you go through one, a wise step is to rebuild your credit. When searching for the best bankruptcy credit cards, it is vital to be realistic about the types of offers you might receive.
In most instances, this might include you choosing a secured credit card. How this works is you make a deposit to open the account that becomes your credit line. And through responsible use and timely repayments, you’ll improve your credit score, allowing you to secure better opportunities in the future. With these things in mind, here are some cards you should consider.
Intro Balance Transfer APRN/A
Balance Transfer Fee $0 at this Transfer APR
Balance Transfer APR26.99% (Variable)
Late Payment Fee Up to $40
Foreign Transaction Fees None
Penalty APR None
The Capital One Platinum Secured credit card works a bit differently from other market products. When you receive approval, your initial credit line is $200 (unless you plan to pay a higher deposit). However, Capital One determines your initial deposit to activate the account in $49, $99, and $199 increments. It means it is possible to pay as low as $49 to open and access a higher credit line right away.
Moreover, the credit card comes with no annual fee. And best of all, after the first six months of on-time payments, Capital One might consider extending your credit line with no further deposit on your part. Therefore, if you’re searching for a card with the possibility of a higher purchasing power shortly, this could be it.
Pros
- No annual fee
- Lower deposit requirements
- Consideration for higher credit line after six on-time payments
- No foreign transaction fees
- With CreditWise, you gain access to your credit scores for free
- You can also raise your credit limit with a higher initial deposit
Cons
- You won’t receive cashback rewards on purchases
- The interest rate is 26.99%
Intro Balance Transfer APR10.99% for 6 months
Balance Transfer Fee 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
Balance Transfer APR22.99% Variable
Late Payment Fee None the first time you pay late. After that, up to $40.
Foreign Transaction Fees None
- Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter.
- Earn unlimited 1% cash back on all other purchases – automatically.
This secured credit card from Discover includes a refundable security deposit. How it works is you make a deposit (the minimum is $200) that becomes your credit line. After your account is open for seven months, Discover reviews your credit history and can determine to refund your deposit back to you, making your credit card unsecured.
Furthermore, you receive unlimited cashback incentives. It includes 1% on all purchases and 2% on the first $1,000 charged on gas stations and restaurants. After your first year, Discover offers an annual bonus, matching all the cashback you earned. It is a wise way to receive money back for everyday purchases.
Also, Discover does not charge an annual fee for this credit card. And you can keep up to date with your FICO score, as it is on your monthly statements.
Pros
- Unlimited cashback incentives of 1% for all purchases and 2% back on the first $1,000 spent on gas and restaurant purchases
- After the 1st year, Discover matches all cashback you earned
- No annual fee
- Free FICO score updates via your monthly statement
- After 7 months, Discover can refund your security deposit
- Only $200 to open the account (upon approval)
- With Freeze, you can turn off access to purchases if you lose your card, and you receive an overnight replacement
- U.S. based customer service
Cons
- 22.99% APR on all purchases, meaning if you carry a balance every month, the interest rate is high
Late Payment Fee Up to $38
Foreign Transaction Fees 3% of each Transaction in U.S. dollars
Penalty APR None
After a bankruptcy, you might not want to undergo a credit check. It is why this secured option from OpenSky is a wise choice to consider. How it works is you can apply and learn within minutes if you receive approval, with no impact on your credit since they don’t check it. And because they do not check your credit, it increases your odds of receiving approval,
After earning approval, you’ll make a deposit between $200 and $3,000, which becomes your credit limit. Each month, OpenSky reports your payments to all three credit bureaus. Since your payment history is the most important factor in determining your credit score, responsible bill paying with the card is a wise way to see your scores increase. They also enable bill payment alerts each month, so you don’t have to worry about forgetting a payment.
Pros
- No credit check
- You can deposit as little as $200 or as much as $3,000 for your credit line
- Reports payments to all three credit bureaus
- Bill payment reminders are available
- A low-interest rate of 17.39% APR (compared to other options making this list)
Cons
- There is an annual fee of $35
- You won’t earn cash bonus incentives
Balance Transfer Fee N/A
Late Payment Fee Up to $29 for first late payment, $40 for second late payment.
Foreign Transaction Fees None
This unsecured credit card offers flexible credit lines and cashback bonuses. And you can see if you qualify without an impact on your credit score.
Where this card excels in its underwriting, they factor in your Cash Score. With it, they examine your banking history to determine income. It means that even if you struggled with making payments in the past but have a reliable income, it might earn you approval.
If you receive approval, the card offers some agile terms. You can earn cashback bonuses from 2% – 10% at select establishments. Petal also offers its Leap Program. How it works is after six months of on-time payments, you might receive a credit line increase, giving you more purchasing power. The provider does not charge an annual fee for transactions made overseas. And you can enable automatic payments to ensure you’re on the right track.
Pros
- It is an unsecured credit card, meaning you do not have to pay a deposit
- With Cash Score, Petal takes into account your banking when determining approval
- You can earn cashback bonuses between 2% – 10% with select merchants
- You might be eligible for a credit line increase after 6 on-time payments
- There is no annual fees or fees for foreign transactions
- You can use the card digitally through Apple Pay or Google Pay
Cons
- The APR ranges from 19.99% – 29.99% APR
- Cashback bonuses only extend to select retailers
Intro Balance Transfer APR0% intro APR for 12 months on balance transfers
Balance Transfer APR5.99% – 18.00% Variable
Foreign Transaction Fees None
Penalty APR 18.00%
It is one of the best secured credit cards on the market. Those eligible to apply can receive one point for every dollar they charge to the card. You can redeem these points for cash, gift cards, or merchandise.
However, you must be a military member or family member to be eligible. If you are and earn approval, you’ll place the deposit into a savings account. The provider holds it as collateral while you use the card.
After three months, they’ll review your account for a credit line increase. And after six months, you might receive a full refund of your security deposit. Essentially, the card becomes unsecured.
Pros
- No annual fees
- You earn 1 point for every dollar spent (with no rewards cap)
- Could receive a credit line increase in 3 months of on-time payments
- They might refund your deposit within the first six months
- They don’t impose fees on cash advances or balance transfers
- You can access your credit score
Cons
- Not everyone qualifies as you need to be in the military or a qualified relative
- It comes with an 18.00% APR
How did we choose these credit cards?
We examined many factors when determining the best bankruptcy credit cards. High on our list were cards that offered you no or low annual fees. Many lenders try to impose hefty fees when using their rebuilding credit cards. It can include program fees, higher annual fees, or even monthly charges for keeping the account. We eliminated any card offering these.
Meanwhile, we also considered the long-term prospects of using these cards. After all, you want the card to evolve as you improve your credit score. With this in mind, we wanted to choose cards that gave you higher credit lines after making on-time payments.
And cashback incentives also played a role in our decision-making process. If you could earn cashback on purchases while rebuilding your credit, that’s a win in our book.
Which is the right crdit card for you?
The best for cashback bonuses: Discover it Secured credit card
With this credit card, you earn an unlimited cashback bonus of 1% on all purchases and 2% on the first $1,000 charged for dining or gas. And after the first year, Discover matches all the bonuses you acquired. It is free money for making regular purchases.
The best for flexible purchasing power: Capital One Platinum Secured credit card
This secured card is one of the few that offers you flexible terms upon opening the account. Depending on your credit, you might only have to put down a deposit of $49 or $99 to open the card. And after six timely payments, they’ll review your account for a credit line increase. This card is perfect for those seeking simple terms and increased purchasing power.
The best for military families: Navy Federal Credit Union nRewards Secured credit card
You can rack up the rewards, as this card gives you one point for every dollar charged. You can also receive a credit line increase after three timely payments. And after six months, you could have your deposit refunded. You’ll also never pay an annual fee, foreign transaction charge, or an added cost for transferring a balance. Overall, it gives you many benefits you might not find with similar options.
The best for no credit checks: OpenSky Secured Visa credit card
The OpenSky Secured Visa credit card is a convenient option if you do not want to undergo a credit check. If you earn approval, your deposit becomes your credit line. The provider also reports your payments to all three credit bureaus, ensuring your responsible behaviors help you build your credit score.
The most flexible underwriting: Petal 1 Visa credit card
What makes the Petal 1 Visa credit card the most creative is the way they determine your approval. Along with your credit score, they’ll also examine your bank history. Even if you had credit problems in the past, a reliable income stream helps improve your odds.
How long after bankruptcy can I have a credit card?
Once your bankruptcy discharges, you can be eligible for a credit card. You should check your credit score before applying, as it can help you understand the type of realistic options available to you. In many cases, you’ll likely have an easier time receiving approval for a secured credit card. Banks are more willing to extend credit if you provide cash collateral upfront.
How does a secured credit card work?
With these cards, you make a deposit that becomes your credit line. After making purchases, you receive statements each month, where you can pay off the balance or make the minimum payment. If you make the minimum payment only, you’ll also pay interest on it. Many providers offer solutions where they’ll extend your credit line after so many on-time payments (normally, this is between the first 6 months to a year). And with others, they might refund your deposit entirely and make the card unsecured once they see you’re paying on time consistently.
How can I use credit cards to improve my credit score?
Rebuilding your credit will be of paramount importance after your bankruptcy. You can accomplish this by paying your bills on time to establish a reliable payment history. Moreover, it is vital to exhibit responsible buying behaviors. It means you do not want to max out your credit card. And with secured cards, it can be a bit trickier since the credit lines are relative to your deposit. If you do not have much money to put down, you’ll have lower available credit. Therefore, the wisest course of action is making a small purchase (under $25) every month and paying it off. Doing so establishes a stable history while showing lenders you are not relying too much on credit. Over time, it will help you build your credit score.
How do I make my deposit?
You can set up a payment to deduct from your checking or savings account. Some card issuers also allow you to make installment payments to satisfy the deposit requirement, provided you make all payments within the timeframe they impose. Once you make your deposit in full, your provider mails your credit card.
Are there alternative credit cards worth considering?
Yes, there are many credit-rebuilding credit cards available. However, you want to pay close attention to the fees they charge, as many banks take this opportunity to impose hefty fees. Here is an alternative to consider:
Credit One Bank Platinum Visa for Rebuilding Credit
This card offers many of the same perks found in the other cards making our list. You earn 1% cashback on all purchases. And they’ll review your account regularly to determine if they can raise your credit line. The annual fees are expensive, though. For the first year, it is $75. After the first year, it rises to $99. You’ll also pay an interest rate of 23.99% APR on purchases. Due to the higher annual fees make it a less desirable option than other credit cards making our list.
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