Personal - Finding the Best Credit
Card After Bankruptcy
Finding the best credit card after bankruptcy is not that difficult,
if you know where to look and what to look for.
Let’s start by talking about secured and unsecured credit cards. When
it comes to applying for a credit card after bankruptcy one question
that a lot of people seem to have is: Should I apply for a secured
credit card or unsecured credit card?
In case you don’t know the difference, a secured credit card is
“secured” by a special savings account you establish with the credit
card issuer which acts as collateral for your credit limit.
For example, you deposit $500 in a special savings account and then
have a $500 credit limit. If you default, the credit card issuer simply
takes the money in your special savings account.
Unsecured credit cards are just that – unsecured. Meaning the person
fills out a credit application and, based on their credit report,
income, etc. are approved for a certain credit limit. Of course, they
could also be declined depending on the credit card issuer’s guidelines.
So which is best? It depends on your credit history. However, if you
apply for a secured credit card you have a higher chance of getting
approved versus an unsecured credit card.
But be careful. Not all secured cards are created equal. And to make
matters worse, there are tons of banks out there pushing secured credit
cards!
So how do you find the best credit card after bankruptcy? Come up
with a list of criteria that the secured card needs to meet in order for
you to consider it. When I’m researching secured cards, I apply eight
criteria. Not many meet these criteria so I’m able to narrow down the
choices quickly.
What are the some of the eight criteria? For example, a low interest
rate is important. While researching some secured credit cards I ran
across one with an interest rate of 23.99% and another with an interest
rate of only 9.25%.
This is just one of the criteria I use to find the best credit card
after bankruptcy – and look at the potential savings! Over several years
you could save hundreds or even thousands of dollars in interest
depending on the balance you maintain.
Okay, here’s another criteria: application fees. Again, I found some
secured credit cards that have no application fees and one that had a…
are you ready for this… $120 application fee! Sadly, people have paid
it!
Let me give you one more criteria you can use to find the best credit
card after bankruptcy: You want to make sure the secured card issuer
reports to all three credit bureaus. But you also want to make sure they
report it a certain way.
I don’t have room here for all eight criteria, but hopefully this
gives you an idea of some of the things you need to look at when it
comes to finding the best credit card after bankruptcy.
By the way, don’t apply for too many credit cards at once. If you do,
it can hurt your credit score. That’s why if you’re uncertain as to
whether or not you’d be approved for an unsecured credit card it may be
better to apply for a secured credit card.
Now you know some steps you can take toward finding the best credit
card after bankruptcy!
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Copyright © 2006 Innovative Solutions Publishing, Inc. All rights
reserved.
DISCLAIMER:
This information is designed to provide only a general overview of
the subject matter herein.
This information is provided with the understanding that neither the
publisher nor author is engaged in rendering legal, accounting or other
professional advice. If legal or other expert assistance is required,
the services of a professional should be sought.
Neither the publisher nor author shall be liable for any loss or
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