By Ryan C. Wood
The best credit cards to rebuild credit after filing bankruptcy are secured creditors with no annual fee. Do they exist? Yes, secured credit cards with no annual fees do in fact exist. Like all parts of capitalism there are business, banks and lenders that are targeting this segment of society and offer services. Many of my chapter 7 clients report receiving vehicle loan offers in the mail even before they receive a discharge in their chapter 7 bankruptcy case. Lenders are targeting them given the lenders know they have not debts post-discharge.
Best Credit Cards to Rebuild Credit After Filing Bankruptcy
The following is a list compiled from many different websites and the information may no longer be accurate due to interest rate changes and other factors. Some of the interest rates are very high. If you pay off the balance each month it does not matter at all though. You may want to start with the highest interest rate no annual fee cards since they are more likely to give you a card. If no success, then try the low interest rate low annual fee cards. If not then try the high interest rate with high annual fee cards.
Surge MasterCard: Annual Fee $75 – $100 APR- 26% – 30%
Total Visa Unsecured Card – No additional information listed
Petal “1” Visa Credit Card: No annual fee APR – 20% – 30%
Platinum Elite Credit MasterCard Secured Card: Annual Fee $29 APR – 19.99%
- First Progress
Capital One Secured Credit Card: No annual fee APR – 26.99%
Discover It Secured No annual fee APR – 22.99%
- 1% – 2% Cash back on certain purchases
Milestone Gold Mastercard: Annual Fee $35 – $100 APR – 24.90%
Avant Credit Card: Annual Fee $39 APR – 25.99%
Next Gen Platinum Master Credit Card Annual Fee $48 – $75 APR – 35.99 %
- First Digital
Official Nascar Credit Card Annual Fee: $0 – $100 APR – 17.99% – 23.99%
- Credit One Bank; 1% cash back on certain purchases
Platinum Prestige Mastercard Secured Card Annual Fee: $49 APR – 9.99%
Merrick Bank Secured Visa Card Annual Fee: $36 APR – 17.45%
Platinum Elite Mastercard Secured Credit Card Annual Fee: $29 APR – 19.99%
Credit One Bank Plantinum Visa Annual Fee: $0 – $99 APR – 17.99% – 23.99%
- For Rebuilding Credit
Reflex Mastercard Annual Fee: $75-$99 APR- 25.90% – 29.99%
First Access Visa Credit Card Annual Fee: Unknown APR – Unknown
Fingerhut Advantage Credit Account Annual Fee: $0.00 APR – 29.99%
- By WebBank
Indigo Platinum Mastercard Annual Fee: $0.00 – $99 APR – 24.99%
The Open Sky Secured Visa Credit Card Annual Fee: $35 APR – 17.39%
Platinum Select Mastercard Secured Card Annual Fee: $39.00 APR – 13.99%
How To Rebuild Credit After Bankruptcy
Never ever pay anyone or any company to help you rebuild your credit. Not even a bankruptcy attorney like me. There is no magic wand that can be waived to fix a credit score. If you have inaccurate information on your credit report is should be removed so it does not drag down your credit score. You can do this yourself and for little effort. Do not call the phone number on that sign you see posted on a telephone pole promising to fix your credit in 30 – 60 days. It is a scam. At the same time you are always permitted to pay someone to wash your car even when the car is not dirty.
- Pay Your Bills Each Month On Time Each and Every Month
Yeah, easier said than done right? It is still the single most important step you can take to rebuild credit once things did not go quite right. Pay your cell phone bill on time. Pay your rent on time. Pay your utility bills on time. If you do obtain a credit card or somehow are allowed to keep a credit card be sure to pay the monthly balance off in total each month. Do allow a balance to remain that accrues interest. It all matters at this point and every little bit will help rebuild your credit.
- If You Have Credit Do Not Use It All
This is referring to the total amount you could borrow or use on your various credit accounts. For example if you have two creditors both with credit limits of $10,000 you have a total of $20,000 in available credit. If you use up all of your available credit you will probably need the services of a bankruptcy lawyer sooner than later. The amount of credit you use versus the amount you have is a metric used for your credit score. The lower the percentage the better for your credit score., For example if you have $20,000 in available credit and you are have a balanced owed totaling $18,000 you are using 90% of your available credit. Not good. If you are only using $2,000 of the available $20,000 you are only using 10%. That is what you want. So a trick you can play to help this percentage is to apply for more credit cards thereby increasing your available credit while the amount you are using stays the same. This will lower the percentage of your available credit you are using. In the example above the person with $18,000 in debt could apply and obtain two more credit cards each with $10,000 credit limits. The would not have $40,000 in available credit while only using $18,000 lowering the percentage to 45% of credit used. This is much better than 90% they had previously. See number three below though too.
- Opening A Bunch of New Accounts All At Once
Inquiries for obtaining credit can damage a credit score. Each time you open a new account an inquiry is made to the credit bureaus and these temporarily will lower your credit score. So if you open five new credit accounts within a six month period you will have many inquiries and your credit score will suffer. This is a game of chess. It is not just jumping over your opponent like in checkers. So open accounts over a period of a long time to increase your available credit rather than all at once. Just because you have $200,000 in available credit does not mean you have to use it. That is the difficult part when things do not go as planned and credit are used for basic living expenses such as food and utilities. But this is about rebuilding credit and having a great credit score so increasing your available credit slowly over time is a good thing.
- As Mentioned Above Apply For a Secured Credit Card
Secured credit cards are a great way to rebuild credit. You will have to provide an initial deposit so secure the repayment of the credit card but that is fine. As you use the secured credit card and there are no issues they will increase your credit limit and eventually the deposit can be refunded to you. It is important to note this is not a pre-paid card but a secured credit card.