Bankruptcy can stay on your credit record for up to 10 years which can be pretty frightening. Nonetheless, we are here to help learn how to get a credit card after chapter 7 bankruptcy and get back into the credit market after you get your discharge.
While you’re still in or coming out of a bankruptcy case, some banks and card issuers are still ready to lend to you. You may get credit offers from credit card companies, local car dealerships, and furniture stores. As enticing as this may sound, be careful not to fall for every offer that comes your way. We advise that you carefully investigate the terms that come with every offer in order not to fall a victim.
Why Are Credit Card Companies Still Willing To Lend To You?
As a chapter 7 bankruptcy debtor, it is surprising to note that credit card companies are still willing to lend to you. Here the reasons why they do so;
The creditor sees an avenue to charge a higher interest rate.
It is believed that since you just discharged thousands of dollars in debt as a debtor, your resources (i.e.) can be used to pay back a new credit.
As a debtor, you can’t file another bankruptcy for some time.
Credit Cards You Can Qualify for After Filling Chapter 7 Bankruptcy
Here are some credit cards you can qualify for after filling chapter 7 bankruptcy;
Secured Credit Card
If you are going for a secured credit card, just bear it mind that the lender or issuer will require you deposit a sum of money into a special savings account with the institution. This deposit amount is normally equal to the lending limit the institution will allow on the account. The deposit acts as a security for the lender. In the event of any default in the future, the lender draws the money from the deposit account to pay off or pay down the credit balance.
If you do not default in your payment, the money in the savings account stays yours. After a length of on-time payments, some companies will allow you to convert a secured card to an unsecured card with a higher credit limit
A secured credit card comes with a lower interest rate than any unsecured accounts. You can qualify for it right after bankruptcy.
Capital One Secured Mastercard
This card comes with a security deposit which can be less than credit limit which you can pay in installments, roadside assistance, and car rental.
- Annual Fee: None
- APR: 24.99 percent
- Late Payment Fee: Up to $39
- Limit/Deposit: $49 – $200 based on your creditworthiness.
First Progress Platinum Prestige MasterCard Secured Credit Card
This card offers a lower annual interest rate than most secured cards.
- Annual Fee: $44
- APR: 11.99%
- Limit/Deposit: 200 – $2,000.
Wells Fargo Secured Credit Card
There’s roadside assistance and cell phone damage protection with Wells Fargo secured credit card.
- Annual Fee: $25
- APR: 20.24%
- Limit/Deposit: $300 gets you a credit limit of $300.
Unsecured Credit Card
Applying for an unsecured credit card means you don’t put up any security or collateral (i.e. deposit). In the event of any default, the credit card company comes after you personally as they have nothing to apply against your balance.
Credit One Bank Platinum Visa
Here, you get 1% cashback on gas purchases.
- Annual Fee: $0 – $75
- APR: 16.99% – 24.99%
- Limit: Initial limit will be $300 – $500 based on your creditworthiness.
Milestone Gold MasterCard
With this card, you are at liberty to choose your custom design.
- Annual Fee: $35 – $99
- APR: 23.90%
- Limit: $300.
If you are a debtor after the order of chapter 7 bankruptcy, you now know what to do, where to go, and what credit card to get after bankruptcy.