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The 3 Best Credit Cards After Bankruptcy, and What to Know Before Applying

One of the many side effects of bankruptcy is the impact it makes on your ability to qualify for a credit card. Getting a credit card after bankruptcy isn't impossible, but it may be difficult due to the long-term damage bankruptcy does to your credit score. This can be frustrating for bankruptcy filers, since responsibly utilizing a credit card is one of the ways you can repair your credit. Fortunately, there are still options for people who are recovering from bankruptcy, such as becoming an authorized user on another person's account or opening a secured credit card in your own name.

These are the best credit cards for bankruptcy filers, and everything you should know before applying.

The Best Credit Cards After Bankruptcy

There are many credit cards for people trying to repair bad credit, but some come with few benefits and high fees that do more harm than good for the cardholder. These are the best credit cards for bankruptcy filers who are just starting to get their finances back in order.

The Best Cash-Back Credit Card for Bankruptcy Filers

On Discover's Secure Website

Discover it® Secured

On Discover's Secure Website
INTRO OFFER: Discover will match ALL the cash back you’ve earned at the end of your first year, automatically. There’s no signing up. And no limit to how much is matched.
  • No Annual Fee, earn cash back, and build your credit with responsible use.
  • It's a real credit card. You can build a credit history with the three major credit bureaus. Generally, debit and prepaid cards can't help you build a credit history.
  • Establish your credit line by providing a refundable security deposit from $200-$2500 after being approved. Bank information must be provided when submitting your deposit.
  • Automatic reviews starting at 8 months to see if we can transition you to an unsecured line of credit and return your deposit.
  • 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. Plus, earn unlimited 1% cash back on all other purchases.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score
  • We automatically match all the cash back you've earned at the end of your first year.
  • Receive FREE Social Security number alerts-Discover will monitor thousands of risky websites when you sign up.
  • Click "APPLY NOW" to see rates, rewards, FICO® Credit Score terms, Cashback Match™ details & other information.
  • No Annual Fee, earn cash back, and build your credit with responsible use.
  • It's a real credit card. You can build a credit history with the three major credit bureaus. Generally, debit and prepaid cards can't help you build a credit history.
  • Establish your credit line by providing a refundable security deposit from $200-$2500 after being approved. Bank information must be provided when submitting your deposit.
  • Automatic reviews starting at 8 months to see if we can transition you to an unsecured line of credit and return your deposit.
  • 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. Plus, earn unlimited 1% cash back on all other purchases.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score
  • We automatically match all the cash back you've earned at the end of your first year.
  • Receive FREE Social Security number alerts-Discover will monitor thousands of risky websites when you sign up.
  • Click "APPLY NOW" to see rates, rewards, FICO® Credit Score terms, Cashback Match™ details & other information.
Annual Fee
$0
APR
25.24% Variable
Credit Needed
{"onCurrent":true,"message":"There are various types of credit scores. Each creditor uses a variety of different types of credit scores to make lending decisions."}
Please refer to issuer's website
Editor's Rating
{"onCurrent":true,"message":"Our team rates credit cards objectively based on independent research, the features the credit card offers users, and how it compares with other available cards in its category. The ratings are the opinion of our editors, and are not influenced by any outside factors, including any compensation the site may receive from certain advertisers."}

With no annual fee and up to 2% cash back on certain purchases, the Discover it® Secured is one of the best cards for bankruptcy filers. Not only does it provide you with your FICO Credit Score for free each month, so you can track your progress toward rebuilding your credit, but it will also double your cash back at the end of your first year. Like most secured credit cards, you'll have to supply a security deposit up front to open your account. Discover will monitor your account, and if you pay your balance off on time each month, you may eventually be refunded your deposit and upgraded to an unsecured account.

The Best Low-Deposit Credit Card for Bankruptcy Filers

On Capital One's Secure Website

Capital One® Secured Mastercard®

On Capital One's Secure Website
  • No annual fee, and all the credit building benefits with responsible card use
  • Unlike a prepaid card, it builds credit when used responsibly, with regular reporting to the 3 major credit bureaus
  • You will get an initial $200 credit line after making a security deposit of $49, $99, or $200, determined based on your creditworthiness
  • Get access to a higher credit line after making your first 5 monthly payments on time with no additional deposit needed
  • Easily manage your account 24/7 with online access, by phone or using our mobile app
  • It's a credit card accepted at millions of locations worldwide

Note: The information in this box was provided by Capital One and is not part of our independent analysis.

  • No annual fee, and all the credit building benefits with responsible card use
  • Unlike a prepaid card, it builds credit when used responsibly, with regular reporting to the 3 major credit bureaus
  • You will get an initial $200 credit line after making a security deposit of $49, $99, or $200, determined based on your creditworthiness
  • Get access to a higher credit line after making your first 5 monthly payments on time with no additional deposit needed
  • Easily manage your account 24/7 with online access, by phone or using our mobile app
  • It's a credit card accepted at millions of locations worldwide
Annual Fee
$0
APR
26.99% (Variable)
Credit Needed
{"onCurrent":true,"message":"There are various types of credit scores. Each creditor uses a variety of different types of credit scores to make lending decisions."}
Limited, Bad
Editor's Rating
{"onCurrent":true,"message":"Our team rates credit cards objectively based on independent research, the features the credit card offers users, and how it compares with other available cards in its category. The ratings are the opinion of our editors, and are not influenced by any outside factors, including any compensation the site may receive from certain advertisers."}

Like the Discover it® Secured, the Capital One® Secured Mastercard® requires you to submit a security deposit to open an account. But while most secured cards have a credit limit equal to the amount you deposited, the Capital One® Secured Mastercard® enables you to earn a higher credit limit after five months of timely payments. If you don't mind putting down a higher deposit, the Discover it® Secured still offers better rewards than the Capital One® Secured Mastercard®, but MasterCard products have the added perk of being accepted at more places nationwide than most Discover cards.

The Best Airline Credit Card for People with Bad Credit

On US Bank's Secure Website

AeroMexico Visa Secured Card

On US Bank's Secure Website
3,500 First Use Bonus Miles plus Complimentary Companion Certificate
  • Double miles on gas and groceries
  • One mile per $1 spent on eligible net purchases
  • 3,500 first use bonus miles plus Complimentary Companion Certificate
  • $99 Companion Certificate with renewal
  • Complimentary Baggage
  • Double miles on gas and groceries
  • One mile per $1 spent on eligible net purchases
  • 3,500 first use bonus miles plus Complimentary Companion Certificate
  • $99 Companion Certificate with renewal
  • Complimentary Baggage
Annual Fee
$25
APR
24.74%
Credit Needed
{"onCurrent":true,"message":"There are various types of credit scores. Each creditor uses a variety of different types of credit scores to make lending decisions."}
Poor
Editor's Rating
{"onCurrent":true,"message":"Our team rates credit cards objectively based on independent research, the features the credit card offers users, and how it compares with other available cards in its category. The ratings are the opinion of our editors, and are not influenced by any outside factors, including any compensation the site may receive from certain advertisers."}

Just because you're limited to secured credit cards doesn't mean you can't still earn free flights. The AeroMexico Visa Secured Card offers people with poor credit double miles on certain purchases, a 3,500-mile bonus for opening and using your account, and a complimentary companion certificate for a free flight.

Unlike the other cards on this list, the AeroMexico Visa Secured Card does come with an annual fee of $25, but that low fee is more than covered by the companion pass. Currently, flights from New York City to Cozumel, Mexico, range from $350 to $650, meaning your card could save you upwards of $625 without other rewards included.

Should You Get a Credit Card After Bankruptcy?

Getting a credit card after bankruptcy can be a smart move, provided you can manage it responsibly. The bankruptcy will have damaged your credit score, and making on-time credit card payments is one of the best ways to rebuild your creditworthiness. Before filling out a credit card application after your bankruptcy, though, consider the reasons you got into financial trouble in the first place and if getting more credit is a move you can handle at the moment.

Perhaps your bankruptcy was the result of an unforeseen and unlucky event, such as a medical emergency, divorce, job loss or natural disaster, rather than bad money management. In that case, you’re more likely to be ready for the financial responsibility of having a credit card again and for beginning the long road to rebuilding your credit. Just make sure to shore up other areas of your financial well-being—such as a stable job and an emergency fund—so you can be prepared for any unexpected challenges you may face in the future.

If, however, the financial spiral that landed you in bankruptcy included overspending, under-saving or bad budgeting, don’t be too quick to access credit again. Instead, work with a credit counselor or financial planner to create a workable budget based on your income and monthly bills. It should also include a plan to grow your savings. If you need the convenience of a payment card in the meantime, use a debit card linked to your checking account or a prepaid debit card. Once you have demonstrated to yourself and others that you can pay your monthly bills on time and save consistently over a long period of time, then consider adding a credit card to the mix. Use it sparingly and responsibly to improve your credit and to build your confidence in managing debt.

Find the Best Credit Card for You

What kind of card do you want?

What's your credit score?

{"onCurrent":true,"message":"There are various types of credit scores. Each creditor uses a variety of different types of credit scores to make lending decisions."}

How Long After Bankruptcy Can I Get a Credit Card?

Although its negative impact gradually lessens over time, a bankruptcy will stay on your credit report for seven to 10 years. This means your options will be limited for some time. Exactly how long you'll need to wait will depend on the type of bankruptcy you file: Chapter 7 or Chapter 13.

Type of BankruptcyWhen You Can Apply for Credit Card
Chapter 7After about 3 months
Chapter 13After 3-5 Years

Chapter 7 bankruptcy, also known as a liquidation of assets, sells off eligible assets to cover as much of your outstanding debt as possible. The bankruptcy and debts associated with Chapter 7 are typically discharged within three months but remain on your credit report for 10 years from the filing date.

In a Chapter 13 bankruptcy, also known as an adjustment-of-debt plan, the debtor makes partial payments to creditors as part of a three- to five-year repayment plan. The bankruptcy is discharged after the completion of the plan. A Chapter 13 remains on your credit report for seven years from the filing date.

What to Do After Your Bankruptcy Is Discharged

Once your bankruptcy is discharged, you should pull your credit reports from Equifax, Experian and TransUnion to confirm that your lenders are accurately reporting the discharge. Only the debts included in the bankruptcy filing should be reported as discharged. Also, double-check that all of those accounts included in the bankruptcy show a zero balance on your credit reports. After you’ve confirmed that your credit reports are accurate, you can then consider applying for a new credit card.

Even after your bankruptcy is discharged, it may take a while to qualify for a new credit card. Some credit card companies may reject your application simply because you have a recent bankruptcy on your credit report. Others may be less stringent because your risk of filing for bankruptcy again is low, since there are rules restricting when you can file for a second bankruptcy.

Credit Card Strategies After Bankruptcy

Following a bankruptcy, it will be difficult to qualify for an unsecured credit card with low interest rates, high credit limits and attractive rewards programs. But there are still two ways you can regain the convenience of a credit card and the benefits it has for your credit score: secured credit cards and becoming an authorized user.

Secured credit cards: These cards are designed for people with bad or no credit. They require you to make an up-front deposit—typically between $200 and $1,000—to act as a guarantee against the card's line of credit. The size of this deposit will usually also act as the credit limit on that account. For example, if a card requires a $750 deposit to open an account, you won't be able to charge more than $750 to that card at any time. There are a handful of secured credit cards, though, that require only a nominal security deposit and charge no annual fee, yet provide a higher line of credit. The deposit is returned if you close the account with a zero balance.

The annual percentage rates (APRs) on secured credit cards are typically higher than the average credit card, so carrying a balance is prohibitively expensive. The key is to use the card responsibly, charging no more than 30% of the credit limit and paying off the balance each month in full.

Make sure your card issuer reports your payment history to at least one of the three credit bureaus, so you can rebuild your credit history. Some lenders will return the security deposit to cardholders after having made timely payments over a long period, such as 12 months, and convert the card to an unsecured one. A few secured cards also come with a rewards program, but be careful to not overspend to earn rewards.

Becoming an authorized user: Another way for you to get a credit card after bankruptcy is to become an authorized user on a card account belonging to someone else, such as a partner, parent or close family member. This is a great option if you’re focused on improving your credit score, since the card’s payment history will be added to your credit report. To get the most credit-building power, become an authorized user on a card that has a high limit, low balance and long, positive payment history. On the other hand, if the cardholder has a history of late payments and carrying a balance from month to month, you'd probably be better off adding your name to someone else's account.

Make sure you and the account owner make an agreement up front about how much you're allowed to spend each month, since they're ultimately responsible for any debt you incur.

Avoid Unsecured Credit Cards After Bankruptcy

There are a handful of unsecured credit cards aimed at consumers with bad credit, such as the Credit One Bank® Unsecured Platinum Visa®. The majority of these cards come with very low credit limits, high APRs of between 25% and 29.99%, and annual fees that can easily exceed $100 a year. Some also have a one-time processing fee to open the account and monthly servicing fees on top of the annual fee. In short, you pay a lot for the privilege of avoiding a security deposit.

Similarly, store credit cards also have lower qualification standards, so a bankruptcy may not disqualify you. But these, too, come with low limits and high APRs, and usually have limitations on where they can be used.

Because of their fees, unsecured credit cards for bad credit typically are more expensive than secured cards. There are plenty of secured cards that don’t charge annual fees, and you can get your security deposit returned as long as you pay your balances off in full every month. But with these unsecured cards, the fees you pay won’t be returned.

Frequently Asked Questions

When you apply for a credit card, issuers will check your credit report to see if you qualify. This check will be indicated on your report and may temporarily lower your score. This may feel like a catch-22 for people recovering from bankruptcy: you need a credit card to help repair your score, but applying for cards may actually hurt it. For this reason, we recommend you only apply to a secured card meant for people in your situation. That way, you'll only need to apply once and you won't have multiple credit checks listed on your report.

Technically, yes, you can apply whenever you want to. But we don't recommend it for the reasons outlined above. You're unlikely to qualify for most cards before your bankruptcy is discharged, and each check could damage your score.

Comments and Questions

Opinions, analyses, reviews, or recommendations expressed here are the author's alone, and have not been reviewed or endorsed by the issuer. We may be compensated through the issuer's Affiliate Program. For a full list of our advertisers see our disclosure page

* See the online credit card application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However all credit card information is presented without warranty. When you click on the "Apply Now" button, you can review the credit card terms and conditions on the issuer's website.

Info about the following cards: Premier Rewards Gold Card from American Express, Hilton Honors Surpass® Credit Card, American Express® Blue Sky, American Express® Green Card, The Amex EveryDay® Preferred Credit Card from American Express, The Amex EveryDay® Credit Card from American Express, The Plenti® Credit Card from Amex, Blue from American Express®, Platinum Card® from American Express Exclusively for Mercedes-Benz, Bluebird, Centurion® Card from American Express, Hilton Honors American Express Aspire Card, Starwood Preferred Guest® American Express Luxury Card, Amazon Business American Express Card, and Marriott Bonvoy Brilliant™ American Express® Card has been collected independently by ValuePenguin. The issuer did not provide the details, nor is it responsible for their accuracy.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through the credit card issuer Affiliate Program.

These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

How We Calculate Rewards: ValuePenguin calculates the value of rewards by estimating the dollar value of any points, miles or bonuses earned using the card less any associated annual fees. These estimates are ValuePenguin's alone and for illustrative purposes only. The estimates are not a guarantee, agreement, or commitment to redemption amounts and may not have not been reviewed, approved or otherwise endorsed by the credit card issuer.

Example of how we calculate the rewards rates: When redeemed for travel through Ultimate Rewards, Chase Sapphire Preferred® Card points are worth $0.0125 each. The card awards 2 points on travel and dining and 1 point on everything else. Therefore, we say the card has a 2.5% rewards rate on dining and travel (2 x $0.0125) and a 1.25% rewards rate on everything else (1 x $0.0125).

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