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3 Best Credit Cards After Bankruptcy in 2022, and What to Know Before Applying

3 Best Credit Cards After Bankruptcy in 2022, and What to Know Before Applying

The best credit card after bankruptcy is the Discover it® Secured Credit Card, which comes with ample rewards and no credit score required to apply.

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Top credit cards after bankruptcy 2022

Best credit card for bankruptcy filers

Discover it® Secured Credit Card

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Best low-deposit credit card for bankruptcy filers

Capital One Platinum Secured Credit Card

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Best for no credit check

OpenSky® Secured Visa® Credit Card

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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.

We've compiled a list of good card options below for people with bankruptcies on their credit histories. These cards offer flexible deposit options, rewards on spending and low to no annual fees.

The best cash-back credit card for bankruptcy filers

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Discover it® Secured Credit Card

Verdict: Numerous benefits for consumers who have filed bankruptcy.

With the ability to earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. 1% unlimited cash back on all other purchases - automatically, the Discover it® Secured Credit Card 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, after seven months, they may refund your deposit and upgrade you to an unsecured account.

  • Rewards: Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. 1% unlimited cash back on all other purchases - automatically. With Cashback Match, get an unlimited dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically.
  • Deposit required?: Yes; refundable deposit required starting at $200
  • Minimum credit line: $200
  • Earns rewards
  • Easy to be approved
  • Because rewards are offered, card users may overspend in order to earn them
  • Requires refundable $200 deposit


The best low-deposit credit card for bankruptcy filers

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Capital One Platinum Secured Credit Card

Verdict: While it doesn't offer rewards, it does offer flexible refundable deposit options.

Like the Discover it® Secured Credit Card, the Capital One Platinum Secured Credit Card requires you to submit a security deposit to open an account (you'll be required to make a refundable minimum security deposit of $49, $99 or $200). But while most secured cards have a credit limit equal to the amount you deposited, the Capital One Platinum Secured Credit Card starts your credit limit at $200, even if you've only chosen to deposit $49.

If you don't mind putting down a higher deposit, the Discover it® Secured Credit Card still offers better rewards than the Capital One Platinum Secured Credit Card, but Visa and MasterCard products have the added perk of being accepted at more places nationwide than most Discover cards. Note that to pay the Capital One Platinum Secured Credit Card’s security deposit you’ll need access to an authorized bank account.

  • Rewards: No
  • Deposit required?: Yes; $49, $99 or $200 minimum refundable deposit
  • Minimum credit line: $200
  • APR: 26.99% (Variable)
  • Flexible deposit
  • $200 starting credit line regardless of your deposit
  • Easy to be approved
  • No rewards
  • High APR


Best for no credit check

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OpenSky® Secured Visa® Credit Card

Verdict: A bit more expensive to own than our other secured options, but it can still be a great tool for rebuilding credit.

Unlike other cards on this list, the OpenSky® Secured Visa® Credit Card does come with an annual fee of $35. However, there is no credit check to apply and you'll start off with an initial credit line of $200 when you pay the refundable deposit. Unfortunately, this card doesn't come with rewards and costs a bit more to own than the other cards on this list, but it can still be a great option when rebuilding your credit score.

The OpenSky® Secured Visa® Credit Card reports to the three major credit bureaus and can be a huge help in bringing up your credit score when you make your payments on time and in full each month.

  • Rewards: No
  • Deposit required?: Yes; refundable deposit starting at $200
  • Minimum credit line: $200
  • Annual fee: $35
  • APR: 17.64% (variable)
  • Easy to be approved
  • Start with a $200 credit line
  • Reports to the three major credit bureaus
  • Charges an annual fee
  • No rewards

Compare the best credit cards after bankruptcy 2022

Rewards
Required credit score
Security deposit required?
Annual fee
Discover it® Secured Credit Card
  • Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. 1% unlimited cash back on all other purchases - automatically.
  • Discover will match all the cash back you’ve earned at the end of your first year.
300-659Yes - refundable deposit required starting at $200See terms
Capital One Platinum Secured Credit CardNon-rewards Card300-599Yes - $49, $99 or $200 minimum refundable deposit$0
OpenSky® Secured Visa® Credit CardNone300-599Yes - refundable deposit starting at $200$35

Comparing the best credit cards after bankruptcy: Earning rate

Of the three cards we've chosen, only the Discover it® Secured Credit Card offers users any rewards on their spending.

The Discover it® Secured Credit Card offers users 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. 1% unlimited cash back on all other purchases - automatically. Discover will also automatically match all the cash back you've earned at the end of your first year. These are great benefits considering there is no credit score required to apply, so you can earn rewards on your responsible use of your card all while working to rebuild your credit.

While the other two cards on our list don't offer any rewards structure, for consumers who have filed bankruptcy, it's much more important to focus on responsibly rebuilding your credit than on earning rewards, so these cards are good options, too.

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Comparing the best credit cards after bankruptcy: Annual fee

Of our three chosen cards, only the OpenSky® Secured Visa® Credit Card requires users to pay an annual fee of $35.

This is relatively low compared to non-secured credit cards, which can charge anywhere from $95 to over $500 for their annual fee. However, if you are annual-fee-averse, you may want to stick with the other cards on this list.


Comparing the best credit cards after bankruptcy: Refundable deposit

All three cards require a refundable security deposit.

Credit card
Required deposit
Discover it® Secured Credit CardStarting at $200, refundable
Capital One Platinum Secured Credit Card$49, $99 or $200, refundable
OpenSky® Secured Visa® Credit CardStarting at $200, refundable

For the Discover it® Secured Credit Card and the OpenSky® Secured Visa® Credit Card, this refundable security deposit also doubles as your line of credit.

For the Capital One Platinum Secured Credit Card, regardless of which deposit you choose, your credit line will start at $200. You'll also get the option to raise your starting credit limit by paying a higher deposit, up to $1,000.

It's important to note that the primary goal of these credit cards is to help consumers build or rebuild credit by encouraging responsible spending and repayment habits. After each card's designated timeframe of paying off your debt in full and on time, you can receive your security deposit back and graduate to an unsecured credit card.

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 why you got into financial trouble and if you can responsibly manage a new credit account.

Perhaps your bankruptcy was the result of extraordinary circumstances, 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 to open a credit card and begin 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, you landed in bankruptcy due to overspending, under-saving or bad budgeting, you should get your finances in order before you open a credit card.

Instead, work with a credit counselor or financial planner to create a workable budget based on your income and monthly bills. Your budget 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.

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 bankruptcy
When can you apply for a credit card?
Chapter 7After about three months
Chapter 13It may take three to five years to discharge the bankruptcy. You should consult your attorney and the lender to see if you can apply for a credit card before then.
  • 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 do the following:

  • 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.
  • Double-check that all of those accounts included in the bankruptcy show a zero balance on your credit reports.
  • Consider applying for a new credit card once you’ve confirmed that your credit reports are accurate.

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 unsecured credit cards with low interest rates, high credit limits and attractive rewards programs. But there are at least couple options for opening a new credit account:

Secured credit cards are designed for people with bad or no credit. These cards require you to make an up-front deposit — typically between $200 and $1,000 — as a guarantee against the card's line of credit. Your credit limit on the account will usually match the deposit. For example, if a card requires a $750 deposit, your credit limit will be $750.

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, like the Capital One Platinum Secured Credit Card. The deposit is returned if you close the account with a zero balance.

Tip: The annual percentage rates (APRs) on secured credit cards are typically higher than average, 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.

Here are a few features to look out for on secured credit cards:

  • Take a close look at the fees — many cards targeted to applicants with bankruptcies charge annual fees or monthly maintenance fees that can add up to more than $100 each year. Look for a card that doesn't include these fees, or charges a reasonable annual fee (e.g., the Capital One Platinum Credit Card).
  • Make sure your card issuer reports your payment history to at least one of the three credit bureaus.
  • Some lenders will return the security deposit to cardholders after they've made timely payments over a certain period, such as 12 months, and convert the card to an unsecured one.
  • A few secured cards also come with rewards programs, but be careful to not overspend to earn rewards.

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 can be a great option to improve your credit score, since the card’s payment history will likely 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. If the cardholder has a history of late payments and carrying a balance from month to month, you're probably better off not adding your name to the 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, APRs as high as 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, avoiding a security deposit will likely cost you more in the long run.

Store credit cards can also be easier for people with damaged credit to qualify for. But these, too, come with low limits and high APRs, and usually have limitations on where they can be used. A secured credit card will give you more flexibility over a store card.

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FAQs about credit cards after bankruptcy

Will applying for a credit card hurt my credit score?

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 temporarily hurt it, making it even harder to qualify for a credit card. Instead of sending out multiple applications at once, you should do your research and apply for a card within your credit range (secured cards are often a good way to go).

Can I apply for a credit card before my bankruptcy is discharged?

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.

Can I keep a credit card after chapter 7?

While it's generally not a good idea to keep a credit card after filing chapter 7, in most cases it can be done.

Can you get credit cards after filing chapter 7?

Yes, you can get a credit card after filing chapter 7. However, you'll have to wait at least three months to apply, and you'll have the best chance of acceptance if you apply for a secured credit card.

How soon can you apply for credit after filing Chapter 7?

You can typically apply for a credit card around three months after filing Chapter 7.

How soon can you apply for credit after filing Chapter 13?

You can generally apply for a credit card around three to five years after filing Chapter 13.

Methodology

We've analyzed a variety of secured credit cards and cards that accept consumers with poor credit histories to determine our top choices for the best credit cards after bankruptcy. To find the best cards, we compared features like:

  • Earning rate
  • Credit score needed
  • Special benefits
  • Whether or not a security deposit is required

Consumers with poor credit histories will likely still be eligible for one or more of these cards, which can help rebuild their credit when used responsibly.

Our recommendations are not influenced by our advertisers.

The information related to Discover it® Secured Credit Card, Capital One Platinum Secured Credit Card and OpenSky® Secured Visa® Credit Card has been independently collected by ValuePenguin and has not been reviewed or provided by the issuer of this card prior to publication.

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.

Advertiser Disclosure: The products that appear on this site may be from companies from which ValuePenguin receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). ValuePenguin does not include all financial institutions or all products offered available in the marketplace.

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 here are ValuePenguin's alone, not those of the card issuer, and 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 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).