Getting Credit Cards After Bankruptcy

Getting Credit Cards After Bankruptcy

Properly used secured credit cards can help you quickly build a new credit rating. But be well warned that there are sharks swimming in these waters. You’ll have to ask a ton of questions if you want to get just the right card. Make a mistake and you’ll get involved with the wrong issuer who will waste your time or worse, they may throw your entire credit rebuilding program off the tracks. Be careful and be prepared.

First, always ask how long before they convert your secured credit card into a traditional unsecured credit card. Six to eighteen months is the usual range with a year being the most common timespan. Be sure to pursue the card with the best terms and at the same time concentrate on getting a card with a major bank, not one of those sleazy firms that only issue their secured cards to the most credit unworthy. Those issuers have negative reputations that you don’t want listed on your credit record. Try to land a deal with a major national bank.

Here are the key questions to ask:

What is the minimum deposit required? (some banks process cards as low as $100)

How high can you raise the credit line? (by increasing the securing deposit)

Do they report your payment history to all three major credit bureaus? (Very important!)

If so, how do they report your payment? (As a secured or unsecured card?)

Is there an application fee? If so how much is it? (Do they charge huge fees?)

Will they accept a previous bankruptcy? (If not, move on to the next card)

Is there an annual fee? (Some charge one, many don’t)

What will my initial credit limit be? (Will it be the same as my security deposit?)

Do they accept out of state customers? (Only important if you’re out of state)

When they issue an unsecured card later, will it be a new card with a new number?

Do they include toll-free customer support (Handy for checking balances before purchases)

What is the interest rate? (Will usually be around 14-23%)

Will the interest rate fall with a good payment history? If so when?

How do they determine the credit limit on new unsecured credit cards?

You should increase your credit limit as much as possible as this data is reported to the credit bureaus and the higher the limit the better. If your future unsecured credit limit will be the same as your secured credit card, perhaps you should deposit as much as possible just before your conversion is processed. In that way you can quickly gain an impressive high-limit unsecured card credit reference. (if you can come up with the cash)

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