Best Credit Card After Bankruptcy
Q: I just came out my bankruptcy last September. What is the best credit card after you have a BK on file?
A: Thanks for your email Mike. With today’s economy, unfortunately bankruptcy has been almost inevitable for quite a few people in America. Whether it’s due to a job loss or catastrophic medical bills, it’s a very real scenario that most of us are susceptible to. So please don’t beat yourself up over it, because the odds are you were not at fault. So instead of dwelling on the past, try and focus on making a better future.
Are Credit Cards After Bankruptcy Possible?
So is there such thing as a best credit card after bankruptcy? Well even during a prosperous economy, lenders are extremely hesitant to do business with someone that has had a recent bankruptcy. In fact, some lenders like American Express are rumored to blacklist applicants altogether if their current credit report still shows a bankruptcy on it (however the bankruptcy is no longer being reported, it may be possible to apply). Anyway long story short is that it’s an uphill battle during good times, and an even greater battle during bad times. But credit cards after bankruptcy are possible if you play your cards right, literally 
Secured vs. Unsecured
A secured credit card involves putting up collateral (typically cash) and you can then borrow against that amount. For example, you would deposit $500 with the issuer and that would allow you to charge up to $500 on the card. Down the road when you are ready to close the account you will get back your full deposit, assuming you don’t have a balance.
An unsecured credit card is what we typically think of as a normal credit card – something that allows you to make charges without any collateral/deposit. As you can imagine, almost any unsecured credit card application you fill out after a bankruptcy will almost certainly be declined. So that means the best credit card after bankruptcy will most likely be some sort of secured credit card… simply because that’s about the only thing you will be able to get approved for at first, regardless of whether you had a chapter 7, chapter 11, or chapter 13 bankruptcy.
Tips For When You Apply For a Secured Credit Card
There are a lot of shady companies out there that try and take advantage of people when they’re applying for credit cards after bankruptcy. So here are a couple tips to follow to make sure you don’t get ripped off:
Reasonable Fees & Rates: Because they know you have few options, some issuers will try and price gouge you with outrageously high fees that will cost you hundreds per year. Play close attention to the application fees, annual fees, and interest rates. Ideally, you want them as low as possible. Most charge monthly and/or annual fees and unfortunately you will need to be prepared to pay $100 to $150 over the course of your first year.
Credit Bureau Reporting: Did you know that all banks/lenders have to actually pay to report a customer’s credit history to the bureaus? Because of this, some unscrupulous secured credit cards will try and save a few bucks by not even reporting their customers to the bureaus… essentially making their cards useless! So please be sure when you apply for secured credit card that it actually will be reporting your account.
The Best Credit Card After Bankruptcy Currently Available
For over two years in a row this card from one of our sponsors has been rated as the #1 most popular choice following bankruptcy:
I had Chap 7 bankruptcy discharged 3 years ago related to divorced and still am unable to get a credit card. HSBC turned me down. I have had the same job for over 10 years. The only debt I have is student loan debt (pretty significant). Can you suggest a secured card.
I applied for the Orchard Bank credit card and was immediately approved for $300. This is after my bankruptcy discharge. I am requesting for an increase to 1K.
I’ve applied and received an Orchard Bank Mastercard. Is it a bad idea to apply for the Visa also. I’ve only had the card a month and kept the balance under 30% on the post date. Should I do this a few months 1st or? It’s more so about needed a Visa card than needed more credit. I think I’m best to have my inquiries bunched together rather than spread as I don’t plan on doing anymore for quite some time. Visa is so much more accessible for me with where I use my card. I appreciate any feedback.
Hello, wanted to know I’m in the process of doing a bankruptcy. I listed some banks I had a long time ago in the bk. If i apply for a secured card, do I have to have a bank account to get a card? thanks
I applied for the card mentioned above and it only gave me one card to apply to which I did and then i got something that said it’s under further review and something about 10 to 14 days and then i picked out a design but i don’t think i got it because it was not a secured card and usually when you get the dreaded 14 days thing it means your declined.
better yet, here is what it said
We are unable to finalize your credit card application.
You will be hearing from us within the next 10-14 days. Thank you!
Filed BK back in December 2011. Post divorce situation. I am proud to say I am on my way to a full credit recovery. Applied last night after I found and read this forum. Unsecured card (Orchard) should be here in about two weeks. Thank you for the “free” information. Frankie
So i was approved for the card and then i decided i didn’t need the card. I haven’t payed the processioning fee or selected a card once I got to that screen of applying. I just closed it, I don’t need a card. Will I be sent one or will it just cancel seeing that i didn’t pay the fee?
It sounds like you only did the pre-selection process, to see which cards you were pre-qualified for, is that correct? If so, then you didn’t follow through with applying for a card, and you wouldn’t receive a card.
no i did that then still applied not knowing that there was fee’s involed to have the card i just didnt select the design on the card i closed the screen will i still recieve a card and it also didnt tell me the limit i was approved for thats another reason i closed the screen.
So to follow up, I was approved for an unsecured mc thru orchard bank. Thanks for the point in the right direction. I’m not sure if I was acting prematurely, but I decided, upon reading further, to apply for another card as “you need more than one cc to rebuild your credit.” I was pointed to applying for capital one, which was listed on my bkr. Denied. Reason, too many recent delinquent payments or accounts with capital one. It states this is the sole reason I was denied. It gives me the impression I may be able to get an unsecured credit card elsewhere. Are there any other recommendations outside of Orchard Bank MC? I eventually want to obtain a secured card thru my credit union. Carrying a below 30% balance between to CC’s will give me just enough room and fluctuation in monthly bills to build my savings acct up to do so. Thanks for any info. I’ve read up on numerous cards and my head is all over the place. The Cap 1 thing doesn’t discourage me due to the reasoning.
Credit Card Guru,
I was discharged from my bankruptcy in 2007. I applied for an HSBC (Orchard) Credit Card shortly after and was approved for $700.00. Not bad I thought. Additionally, I had an existing overdraft line of credit with Commerce bank which is now TD Bank for $1,500.00 which I have had ever since. I have used this for a while and carried a decent size balance. Still the line remains with no issues. Further, I have carried a balance for some time with my HSBC credit card, which I just paid off completely. That line went from $700.00 to $1,150.00 in one year after opening it. I have a few hundred bucks left on my TD overdraft line, which will be paid off this week.
I checked my credit just before the New Year it was 654 – 710 and 754. I also sold my financed Honda which now shows as paid off. What gets me nervous is that about 3 years ago my ex wife who lives in Canada went to court in Canada to have her child support payments sent through my State who now garnishes the support payments from my job. Just so you know, I have not fallen behind and it appears on my credit as “Paid As Agreed”. It would only show negative if I did fall behind.
All that being said, do you think I stand a chance if I apply for a credit card with TD Bank being I have really good ongoing deposit relations and over draft line of credit? Or should I go for what’s behind door number 3 and apply to Capital One bank. I burned a few banks and know which ones I would prefer to apply to. Your thoughts are appreciated.
That’s tough to say. Sometimes having a checking/savings with a given bank doesn’t necessarily help your chances in getting approved for a card. In the case of TD, I can’t tell you specifically whether or not it helps, but I suppose that yes, it’s probably worth a shot at applying for one of their lower level cards. Good luck.
We just got discharged from a chapter 13 BK last month. All five years paid trustee on time. Have two mortgages with Bank of America, never late, and was not a part of the payment plan.
I took someone’s advice on here and applied for the Bank of America secured card since I have been doing business with them going on 25 years and they turned us down due to the bankruptcy. What is the point! If you are using your own money to secure the card, have two mortgages with them on time and never late… I don’t understand but I’m not happy to say the very least.
Now i don’t know what to do. I’m scared to death to try again for anything. My credit score is 680… that is really not that bad. I’m depressed. I need a guaranteed approval that reports to the credit agencies.
Sorry to hear but I’m not surprised, as I hear a high number of complaints about Bank of America not being BK friendly.
Did you try the above offer? They report to all 3 bureaus.
I have not yet, no. now i’m a little afraid to do so because right now i have only one inquiry and i don’t want all these banks opening my credit report. my question is how many are too many inquiries?
Generally speaking, the higher your score, the more the inquiries will hurt you. In your case of a 680, I think the impact will be minimal (a couple points) if you’re just talking about one more inquiry. The key to inquiries is not to avoid them altogether (because then you would never have credit) but rather to use them strategically.
For your scenario, I would say no more than 1-2 hard inquiries per 6 months (ideally no more than 3 per year). In the future once your score is in the mid to high 700s, then try and go lighter on the inquiries – i.e. a max of 2 per year.
From my experience, the quickest way many people rack up inquiries is by moving and/or changing utilities. Most cell phone companies do a hard inquiry and some (but not all) utility providers will, too. So take it easy on changing cell providers, etc. unless you have to (obviously a cheaper plan elsewhere is probably worth the inquiry though).
Hi Ms Terry, please don’t get depressed that is a no no no no, as I filed for bankruptcy too. I thought that the world was coming down on me then I realized that after paying for credit card debt for so many years, trust me I was paying them more than enough. I made a choice, was I going to keep paying for my credit card or stop feeding my children? I chose to feed my children guilt free and i did learn my lesson of having credit. Now the best one is Capital One at $49 dollars down, I have a 200.00 credit line and to my surprise they approved me with $300.00 dollars secured card, now I use that for things such as a computer desk or a washer machine, those are things that I can see and are useful. I no longer use my new credit card for clothes, handbags and shoes, that is a no no no I will used wisely. So try Capital One. Ok take care and don’t let a credit card put you down. Remember credit cards were designed for American people to believe that without credit, you are nothing. For me that’s is bologna. Good Luck
Hello,
My husband and I are getting ready to file for bankruptcy due to high debt from his business venture (home fix and flips) – he has over $150K in deficiencies (had to foreclose on several properties- the latest foreclosure was in Jan 08). I had great credit (760s) but this last year we started to charge a lot on my credit cards. I now have $20K in CC debt (US Bank and American Express).
In addition to those two credit cards, I have a Discover card and an Orchard card with zero balances and a Chase Slate card with a $600 balance.
I am going to throw the US Bank and American Express into the bankruptcy and hope (fingers crossed) that Discover and Orchard are kept open. What should I do with the Chase Slate? Should I pay the $600 and hope they keep it open (I want to reaffirm it) or should I just go ahead and include that in the bankruptcy as well?
Thank you!
You don’t get to pick and choose which cards you keep or don’t in bankruptcy. They all go. Seek advice from an attorney about your right’s and what to expect.
Thank you. My understanding now is that if I do pay ANY credit cards off, the creditor can still close the account. If the creditor chooses to keep the card open, the balance must be at zero at time of filing AND the available credit will most likely be reduced to $100 to $300.
Ch 7, discharged nov ’11. I applied and was approved for a $300 card. When looking online, the card balance shows $300. I am assuming if there are any upstart fees, they have either been waived or haven’t been applied to the card yet.
Even if I have to pay the 50 something off initially, it is a start. I am also aiming to get a secured credit card with my credit union. They require $100 plus the limit you wish to establish. I will use card strategically as I build up my savings account to do so with a limit I’m comfortable with.
Appreciate the article as it is gave me direction in life after filing.
My wife and I filed bk and it was discharged last month. She applied for the card above and was approved, I applied and was denied, I dont understand.
Hi
My chapter 7 bankruptcy was discharged in Dec. ’11. I was just researching to see which secured credit card I should apply for when I got to this blog, used your link and was approved for an UNSECURED card! The card has $300 limit and with the yearly fee it’s more like $250 but I’m still very happy and very excited that I don’t have to put any money up front. Thank you so much!
BTW, I had an HSBC card that was discharged in the BK, so try it, it might work for you too!
Can I rent a car with a secured credit card without a credit check?
Hello,
I recently filed Chapter 7 last month. It’s a stressful process. I wanted to know can I apply for a cecured card now or should I wait until after my 341 meeting, next week or after I am fully discharged.
I read I can start re-building my credit now even while I’m in the Chapter 7 process.
My Ch.7 bankruptcy was discharged a couple months ago. Since then I have been sent at least six pre-approved card offers with small limits.They want a $75 upfront fee and high interest rates,but all were offered to me unsecured.
Hey Bob, those must be First Premier… avoid like the plague! There are many fees and the $75 upfront is just the start. It’s not worth paying almost $150 per year to get an unsecured credit limit of $300.
Great post! Question: I filed in 2006. So based on the 7 year rule, it’s not fully off my record. I travel a ton for work, and would love to get a rewards card. My ideal goal is to have a marriott card, however I heard their chase backing does not tolerate bankruptcy. What is a good rewards alternative? My credit has been great since, my income has steadily increased in large numbers, and 6 months ago I obtained a $300 secured card.
Best next steps? I don’t want to use my company issued corporate card, I want the rewards
We are almost 4 yrs. out discharged BK… rebuilt credit with Orchard (HSBC), Best Buy (HSBC) and Chase (which was a WAMU card before acquisition) and just recently, bought a house in December with an FHA loan. Middle Credit score in the 710-720. It can be done. All our CC are low limits ($500 & $1700).
Here’s my question…I need to purchase airline tickets and was thinking of applying through Chase, Citi or BofA. I think Chase might deny… Southwest application states if there is a BK on record…any thoughts on Citi? Capital One pre-approved for the Platinum card but I need at least $800 for the flights.
Thoughts?
Glad to hear of your success in rebuilding, Darlene!
As far as the issuers you asked about, here are the ones I would recommend:
Chase: The Chase Slate is probably the easiest to qualify for.
Citi: Same can be said about the Citi Platinum Select
Keep in mind though these cards don’t offer cash back/points, so they’re not the best credit cards out there. But if you’re just looking for something to take you to the next step, then they can make sense.
On your current Chase card, what is the credit limit? You may want to call them up and ask if they will increase it for you w/o a hard pull. I would try that before applying for a new card. But if they require a hard pull, then just apply for a new card instead.
Hello. I filed Bk and was discharged about 2 years ago, but since then am rebuilding my credit with excellent results. I have a credit score in the high 600s. I got a Pre-selected offer in the mail from HSBC for an unsecured CC. with a 0 percent introductory rate. I want to apply for this card but am nervous because in my Bk, I did include a HSBC CC. and am afraid that even though I am pre-approved that they will still turn me down and I will get an Inquire. Is HSBC known to give second chances?
Yes I did the same with HSBC (orchard) and capitol one and extended credit for second chance but the limit wasn’t high but it is a start.
Hi Sweet, thanks for the reply. Your right, I did apply on-line and was approved. and like you said–it is a start.
Hi, I filed in June 2010 so going on 2 yrs. I’ve tried to apply for furniture store credit and have been denied as recently as today 1/25/12.
I’m afraid to keep applying to things and hurting my credit that way.
Any advice? I don’t seem to be getting approved by anyone… I’m getting very discouraged.
Thanks for your time.
Hi Jenn, I’m sorry to hear that! You should be able to get approved for the card I mention at the end of the article – the secured version practically anyone can get. If you click on the link it will take you to a page where you can check if you are pre-approved without a hard credit inquiry. If you apply for an offer you are pre-approved for, then there might be an inquiry but at least it won’t be in vain since you already checked your pre-qualification.
Good luck!
Hi Jenn, Credit one bank should approve you. Go to their website and they have a pre-approval process which won’t be a hard inquire. They explain everything on their website. It is an unsecured card and they do credit increases but there is a yearly fee
My Ch 7 BK was just discharged 3/9/12 and I was approved for $400 thru Credit One bank. I suppose it’s best to start somewhere…..
I declared bankruptcy in November 2011 and I’m anxious to start improving my credit score. I’m told the best way to do this is get a credit card and make timely payments. The only problem is, I included credit cards from Orchard, First Premier & Capital One in my bankruptcty. I’m assumming I’ll be declined if I apply again with them. Are there any other banks (other than those three) that offer unsecured credit cards to people with bad credit? Any other ways to start improving my credit score? My goal is to be able to buy a house in 1-2 years.
To respond to your question. Capital one and orchard have extended credit to even previous customers. I have seen this on many credit repair blogs and I have had credit before bankruptcy with capital one as well. It’s worth a shot
Why deal with some credit card company 2 or 3 states away when you can go into your local banks and get a secured credit card from someone who is likely to know you? If you get one from the bank you currently use, you already have some value to the institution; to me it makes sense to get a card from the ‘bank just down the street’. I, like thousands of others in the last few years, have had a set of unfortunate circumstances; there are 3 banks within 2 miles of my home that will give me a secured card at a good rate. Both of them will consider converting it to unsecured with 12 months of proper payments. Sure, the beginning interest rate is a point or two too high….live with it until you prove yourself to them. Once you have a decent score and have your finances in order, you will have more credit extended to you than you should take.
ken if you have rc wiley out there they will out of bk
My Credit was ruined after selling my Dental Clinic & Building for $2.75 million. I only had outstanding mortgage & loans & credit card bills totaling $750K ($70K) in Credit cards which were not past due. After I paid everything the owners used my EIN# (fraud) and cashed my Accounts receivables and threw away my accounts payable. This Fraud was recognized by the National Practionaire Data Bank and I was issued a new #,which is like a social security # to Dentists. The O.C.C is reviewing my case and the hundreds of thousands of checks Valley national allowed these crooks to cash with my name and my TIN ,NPI#.I am now disabled due to P.T.S.D on $7,800 a month disability. Do I claim Bankruptcy or use my Disability (Temporary) to Discharge my Debt?
Sorry to hear about that Marc. Unfortunately I would have to say your best bet would be to speak with an attorney who specializes in that type of unique situation.
HSBC will not give me a credit card! I had one that I paid off and did not include in my BK before I even did the bankruptcy and I’ve applied twice (every 12 months) and my BK was discharged 3 yrs ago and they still gave me the excuse of the BK. Obviously if HSBC is your sponsor, they are number 1 on your list DUHHH
Hi Fabian, that is because all other HSBC credit cards require good credit – they will not approve you after bankruptcy or with bad credit. Only their Orchard Bank division has cards for bad credit.
The secured version for Orchard has no credit score requirement and is essentially guaranteed (as long are you meet the basic requirements like having a valid mailing address and being 18+).
CreditCardForum advertises almost all major credit card issuers and there are other secured cards that could be promoted here that would be a lot more lucrative. The reason Orchard is my top pick is because (1) low fees, (2) low minimum deposit, (3) only issuer to check your pre-qualification for multiple cards, both secured and unsecured, at the same time when you use the link above. If you don’t think you can get this HSBC card, I challenge you to check and prove me wrong.
Hello,
Just some news about a bankruptcy. My wife and i had to file in March 2009, discharged in Oct of 09.We are 65 year old seniors and this is not easy
We have been approve for a unsecured Capital one. My wife and i both have furniture accounts, where we have them with a 12 month interest free. We also our mortgage for 6 years and have never been late. We are doing great so far but finding it very impossible to get our home refinanced. We are looking to get a retail store credit card but do not know which one to select. We worry about applying for to many that many lower our FICO score. any advice. Thank You.
Hi Ken, sorry to hear of your troubles. As far as the best store card (that’s easiest to get) I would recommend asking on the forum to see what others say. You are far enough out from bankruptcy that your credit should be rebuilding nicely as long as you have a few accounts and manage them optimally. Good luck!
Should you apply for a secured card from a bank that was on your bankruptcy list?
Typically not, unless your BK was a few years ago.