Best Unsecured Credit Card After Bankruptcy?

Posted by CreditCardGuru

newspaper headline for bankruptcyQ: How soon can you get an unsecured credit card after bankruptcy? I’m a few months out and want to rebuild my credit and get one that’s unsecured as soon as possible.

A: Getting unsecured after a bankruptcy is definitely an uphill battle, but it’s not impossible. There are a few things to keep in mind:

  • Don’t randomly apply, instead use this strategy
    Every time you apply for credit (of any form) something called an “inquiry” is recorded on your credit report. Having too many of those inquiries can negatively affect your score (until 12 months later, when they are no longer counted in FICO’s scoring model). So to minimize the number of inquiries made, you need to be strategic and NOT randomly apply for cards. Your best best is to check first if you are matched for any offers. There is only one issuer that I’m aware of that let’s you do this and here is the form to try it out. It only takes a minute to check:
  • Be realistic with your expectations in today’s credit environment
    Yes, it’s been a while since “the great recession” but that doesn’t mean banks went back to doing business like they used to (giving credit to anyone with a pulse). Creditworthiness has to be proven now more than ever. An unsecured credit card after bankruptcy discharge probably won’t happen immediately. You’ll likely have to start with a secured card for at least a little while, but some are a lot better than others (which we’ll discuss in a moment).
  • Stay away from creditors that were part of your bankruptcy
    Example: If a Bank of America credit card was part of your chapter 7 or chapter 13 bankruptcy filing and they lost out on thousands of dollars, the last thing you want to do is hit them up for an unsecured credit card afterward (or at least not for quite a while). As a general rule, when you’re in the early stages of rebuilding your credit, it’s probably best to stick with banks that were not burned in your bankruptcy filing. For example, I’ve heard American Express won’t even touch you with a 10 foot pole if you included them in your filing.
  • Don’t use a high percentage of your credit limit
    Whether you end up getting a secured or unsecured credit card, don’t use a high percentage of your credit limit. Why? Because a part of your FICO score is the credit utilization ratio (what percentage of your credit limits you use). Most people wrongly assume that the more they spend, the better… that’s not how it works.No one knows the magic ratio since that information is FICO’s secret, but the consensus is that using more than 10 percent to 30 percent of your credit limit at any given time will negatively impact your score. So spending above 30 percent of your credit limit should be avoided. Keep in mind that even if you pay your balance in full every single month, the amount reported to the credit bureaus is the balance listed when your billing cycle closes (before your payment is made).

How to get an unsecured credit card?
As mentioned, getting one right after a bankruptcy discharge probably won’t happen. You will likely have to start out with a secured card and then transition to an unsecured card.

  • If you are less than 18 months out it’s going to be difficult to get an unsecured account. And if you’re at this stage, you don’t want to just randomly start applying for unsecured cards and hoping for the best, because each credit application results in a hard pull inquiry (a credit check) which can adversely impact your score for up to 12 months. Being that you’re already at the bottom, the negative effect on your score may seem trivial. But still, it’s best to avoid that, right? This is why I recommend you check out this affordable secured card if you fall under this category.
  • If you are more than 18 months out, your chances of getting approved for a basic unsecured account are better (although you may have to wait ’til ~24 months out). When I say “basic” I’m talking about a no-frills credit card without a rewards program (and you don’t see a lot of those nowadays). You can view the best ones here.

Something to keep in mind: If you get an unsecured card… great! If you get a secured card… that’s also great! Either type will work just fine credit building purposes, assuming you use it responsibly and the account reports to all three credit bureaus.

Try out this form to see if you are pre-selected for any offers:
This article was written or last updated June 2014


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42 comments... read them below or add your own

  1. CP September 19, 2014 at 9:39AM

    Cap one option is doable within CH.13, I am still within CH.13 and 2 years left to go and got approved for 3k credit limit.

    They asked if I was late on a student loan for the last 3 months or if I have default in the last 3 month on any other bill. The answer was no. It was the Platinum CC.

  2. Kim September 10, 2014 at 4:23PM

    OMG so in reading the comments I’m like let me see Nd applied for capital one and got a 2k limit my bk just discharged a month ago :) I’m shocked

    • Mwende September 19, 2014 at 8:25PM

      I was given a Capital One card and received it on a Saturday. I activated the card and by Monday I logged into my account only to find the account was restricted. I was told that it was because of the bankrupt. I was also told by Capital one that they will not allow credit until after 5 years. I was also told by a supervisor that although one may initially qualify for a card, the card will be rescinded b/c capital one does a 2nd credit report which was the case with my card. It may be a small start but Finger Hut will give credit and that is a great but small way to start.

  3. Kris August 23, 2014 at 10:47AM

    I was discharged from 7 on June 9 and just was declined by Cap One. Current credit score is 660

  4. KATY July 31, 2014 at 9:39AM

    My bankruptcy was discharged in the spring of this year and I applied for a Capital One card today 7/29/14 and was approved right away for 2000. and I filed a card from Capital on my bankruptcy.

  5. rachel2classy July 21, 2014 at 7:50AM

    well i got a discharge notice on 7/9 an jus applied an was denied and im totally upset that no one will give me a crdit card????????????????? help

    • veri007 July 23, 2014 at 5:51PM

      Get used to it!!! You will NOT get ANY credit in next 7-10 years. You were bankrupt and insolvent, you are deemed HIGH RISK and NO ONE will ever lend you a money again.

      • LA July 29, 2014 at 9:15PM

        Our Chapter 7 BK was discharged on 7-15. Both my wife and I Just applied for cap 1 quicksilver today and were both approved for $500 cl.

      • John August 5, 2014 at 3:17PM

        You have no idea what you are talking about.

        Credit can be rebuilt quickly once a BK is completed.
        One can buy a car at a good rate within the first year with a good down payment.

        Unsecured credit cards can be obtained within the first year after BK.
        It is possible to be in the 700s within 24 months of BK.
        Many people have a better score the day after BK than they did before they filed.

        Get your facts straight before making silly statements designed to scare the desperate.

      • ILLEST August 5, 2014 at 7:04PM

        TO verI007
        THEN WHY ARE YOU ON THIS FORUM, YOU OBVIOUSLY HAVE SOME CREDIT ISSUES YOURSELF. UNLESS YOU LIKE BEING A BULLY.

    • JenCon July 29, 2014 at 8:21PM

      Try credit one bank. I was discharged on 7/22 and they just approved me

  6. Sheneneh Jenkins, Cosmopologist, Detroit, MI June 19, 2014 at 4:25PM

    I be filed Chapter 7 Bankruptcy in November 2013, and since then, I now be have these cards:

    + Debit card with a national bank
    + American Express Card
    + MasterCard with my Detroit credit Union
    + Capital 1 MasterCard, with 3000 limit, unsecured

    PS ~ STAY AWAY FROM FIRST PREMIER BANK AND CREDIT ONE BANK. These are two of the worst credit cards out there. Also, Credit One Bank used to be called “First National Bank of Marin” — they changed their name to deceive customers. Google First National Bank of Marin name changed to Credit One Bank. This is a scam bank and will rip you off ! So will First Priemer.

  7. AlmostDischarged April 19, 2014 at 8:49PM

    Hello everybody. Love this site. Im about to be discharged any day now. I received an offer for “Credit One” Unsecured credit card. Its expensive and i read bad reviews about it but im afraid that i wont get approved for Capitol One card since i put them in with my bkch7. My question is. Is it better for your credit to have an expensive UNSECURED cc or have a cheap SECURED card? I heard having an unsecured cc boosts your chances of building back your credit.

    • Eric N April 28, 2014 at 10:15PM

      I was approved with Credit One, received a $1500 limit right out of the gate. The main things you need to be aware of are first, that there is a $75 annual fee and that it is billed right away, so it is immediately on your balance. Second, your interest accrues from time of purchase. There is no grace period. Third, interest will be around 22%.
      That being said, and myself having previously had Prime plus zero on two cards totaling nearly 40K, I find it reasonable. They use the high interest rate to mitigate risk, and annual fees are not that unusual. There are a bunch of cards out there that do take advantage of you after bankruptcy. Many offer a $300 limit, then charge you a $95.00 processing fee and an annual fee. That is total B.S. Good luck. So far I am happy with credit one.

  8. Matt April 2, 2014 at 12:51PM

    I was discharged from Bankruptcy March 19, 2014, was approved for a Capital One Platinum MasterCard, $500.00 Credit limit 0 % interest for a year on purchases and no fees! Crazy! However, I am excited to get my credit back in line for I had an 800 credit score up till about a year ago.

    • Mwende September 20, 2014 at 9:17AM

      Matt I am interested to know if Capital One allowed you to keep the card after you received it. I am trying to see if it is worth it apply with them They gave me a card only to rescind the card b/c of a bankrupt.

  9. Linsey March 31, 2014 at 9:40PM

    When we go to court after filing bankruptcy,does that mean we can start applying for credit cards right away?

  10. TJ March 29, 2014 at 11:22AM

    Been discharged (ch 7) for roughly 2 wks, and just got approved for a $500 unsecured card through Capital One. They were also a creditor included in my bk.

    • CapitalOne Customer AGAIN After filing on them with bk April 14, 2014 at 11:40PM

      I had also included capital one in my bk in jan 2014 and they’ve already approved me for 300 unsecured platinum MasterCard no annual fee

  11. Gwen March 24, 2014 at 9:10PM

    I received a 1000 limit from capital one after being discharge 3 weeks ago

  12. Cathey March 16, 2014 at 5:34PM

    We have been discharged 3 years this Oct and I got a cc with $1500 credit line and no secured loan attached I have made payments as they said payments build Your credit so
    I now with my tax refund paid it off $900 so now I feel my credit score
    Of 700 plus is a great plus for us getting our own home again .. What’s your thoughts own this ?

  13. Sandra January 23, 2014 at 3:50PM

    After weeks of wondering if I should apply for a credit card, I decided to take a leap of faith and applied. I have been out of Chapter 7 discharge for 2 months and just tried to apply for a credit card (Capital One Quicksilver) and was declined. I will wait at least 6 months again before re-applying or perhaps wait for pre-qual offers. Pretty bummed out.

    • Tony February 25, 2014 at 7:05PM

      You should try Credit One. They approve me one week after Chapter 7 D/C. It’s expensive, $75 intro annual fee, 24.99% APR, daily interest rate…but it’s UNsecured and came with a $500 CL. I plan to use no more than 30% of CL and pay in full each month for the next year. This should improve my credit score so I can get some reputable offers for a better credit card. Good Luck!

    • Mwende September 19, 2014 at 8:59PM

      Sandra,

      Be encouraged !! Even if they give you a card, they turn around a rescind the card. It happened to me. I spoke with them and they said that they do 2 credit checks one before giving you the card and one after the card is activated. In other words, if they missed something the first time they catch it the next time.I was told by them they do not give credit until after 5 years. I know many are saying that they received a card from Capital One but what some are not saying is that the card was rescinded not long after. I paid the debt that owed to them in hopes that in the future they may reconsider.

  14. Andrew January 4, 2014 at 8:49AM

    Has anyone filed bk and included capital one in there filing, and still been approved for a card months after discharge?

    • Chandler January 11, 2014 at 2:49AM

      I am wondering the same because I did this and my bk was discharged in October.

    • Stacie January 24, 2014 at 3:55PM

      Discharge was 1/16, got approved for unsecured cap one on 1/22

    • Larry Ashby January 27, 2014 at 10:24PM

      Andrew I have been approved for capital one Platinum card with a 3000 dollar credit limit. I was discharged on December the 9th of 2013 and I applied for it on January the 24th 2014

    • Dani February 24, 2014 at 9:59PM

      Yes, I filed Chp 7 (including a Capital One card) following a divorce. It was discharged in November 2013 and today I was approved for $2000 credit limit on an unsecured card.

    • Eric N April 28, 2014 at 10:16PM

      Yes. Didn’t try Capital One because they were in the wifes BK, but I got a pre approval offer from Credit One, applied and got the card. I was a bit surprised actually.

  15. ChaeChae December 20, 2013 at 7:54AM

    I received Chapter 7 discharge papers on 12/8 or 12/9…Today is 12/20 and I have been approved for Capital one platinum $300.00 unsecured that just came in the mail, Capital One Quicksilver $500.00 unsecured and First Premier 300.00 unsecured (don’t think im going to take because of all the fees). My FICO is 576 right now

    • Ty March 26, 2014 at 1:06AM

      Thanks Chae Chae, I saw this post and decided to apply for a Capital One card and got an instant approval for $500… credit score is 581 up 80 points since pre BK and several on time car payments. Chapter 7 discharged on 01/27. Interest rate is high but perhaps I can refinance after on-time payments. Thanks

  16. APPROVED December 11, 2013 at 10:16AM

    Received my discharge papers 3 days ago. Just was approved for for Capital One $300 limit. I am happy. It is a start!

  17. rodney December 19, 2012 at 7:30AM

    I am really trying to rebuild my credit please help

    • dawn May 24, 2013 at 3:45PM

      Rodney, I applied for secured card from capital one and unsecured from credit one bank. approved. They are more willing to work with you

  18. MJA December 13, 2012 at 2:38PM

    I agree about having realistic expectations. Is it really any wonder why banks won’t give someone a good unsecured card with rewards shortly after a BK? You have to start at the bottom with a low-end unsecured card and work your way up!

  19. Gee October 8, 2012 at 11:28AM

    I filed Chapter 7 in May 30 of 2012, discharged Sept. 11,2012… I got letter from First Premier, $700 credit limit, $25 processing fee n $150 annual but get back at end of year. I’m pissed but happy. I want a better card who has it? I had good credit prior but do to child cancer incurred hella medical bills had to file.

  20. SCRWDAGAIN July 30, 2012 at 11:58AM

    orchard gave me pre-approvals on two different occasions and still denied me. I don’t think bankruptcies show on the soft approvals.. At least that’s my theory because even with an active Chapter 13 plan (2.5 out of 5 years) going, my fico is still 670. I get the soft approval then pick my card only to get kicked in the nuts by them. I can’t even get a secured card approved by anybody.. I am just trying to get a head start on rebuilding my once perfect credit. (Before you judge, our dual income household was devastated by a surprise bankruptcy and closure.)

  21. Kevin P July 22, 2012 at 4:28PM

    Orchard Bank was acquired by Capital One. Try either Capital One and/or Credit One bank.

  22. roseiris June 23, 2012 at 4:20PM

    I had a bankruptcy and finished my last pymt 5 years ago. I now have a 740 credit score. What unsecured credit card would be good for me other then Capital One? Thank you.

  23. russ November 14, 2011 at 6:23AM

    Will applying for an Orchard park credit card lower my fico score? I’ve heard that bank inquires sometimes have a negative effect on your score.

    • CreditCardGuru November 15, 2011 at 9:43AM

      The nice thing about Orchard Bank is that when you check your pre-qualification, only a soft credit check is done (which doesn’t affect your score). After that if you choose to apply for an offer you are pre-qualified for, there may or may not be a hard pull- I’ve heard both scenarios.

      Either way, a hard credit inquiry will probably have little to not effect on someone with a low score. It’s those with average to excellent credit that will feel the ding more.

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