When can you apply for a credit card after bankruptcy? It is discovered that it takes four to six months after the initial filing to be completed and the debts fully paid. But in this article, we are going to talk broadly on every subject that surrounds bankruptcy to enlighten your understanding.
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Bankruptcy
A lot of situations happen that later leads to bankruptcy and this is not one of the most pleasant time of a person’s life. Bankruptcy assists people who can no longer pay their debts and intend for a fresh start have no choice than selling their properties to pay off their debts or look for another way to pay off their debts.
The effect of bankruptcy usually has a long-lasting effect on their finances and it takes time for them to recover. But there is light at the end of the tunnel which means you can recover from bankruptcy by applying for a credit card designed for poor or bad credit.
Before going for a credit card you would need to clear your bankruptcy. Until you have fully gotten rid of bankruptcy and the period it takes to get rid of the bankruptcy that determines when you are allowed or eligible for a credit card.
Situations That led to Bankruptcy
There are a lot of situations or events that happen that cause bankruptcy. Situations like:
- Divorce cases.
- Unexpected emergencies may require a large amount of money that is beyond your budget.
- Expensive medical bills.
- Reduced income or Loss of Job.
Types of Bankruptcy
There are different types of bankruptcy. But we are going to talk about the bankruptcy associated with customers.
- Chapter 7: This is the situation where a person’s debt is fully paid. These procedures make free of any debt and give the privilege of a fresh start. But this also leaves you with damage to your credit score. You can apply for a credit card approximately four to six months after full payment and your debts are fully paid.
- Chapter 13: It is called the wage-earner plan. This is where you and the creditor come to the point of agreement. You give a time frame of when you would be capable of paying back. This might seem like a good idea but it still leave an effect on your credit score. It takes about three to five years to redecide how your debts will be paid. Then after your payment becomes complete after restructuring, you would need to wait for approval from the court before you can get a credit card.
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How to go About your Credit Card after Bankruptcy
There are things you need to do. This is because you cannot recover from bankruptcy and then land into issues with your credit card and this could also help your credit score.
- Before the month ends you should make sure you pay off your bills rather than accumulating them.
- If you were able to get rid of your debt, try to spend wisely and know your budget. But if the situation is otherwise which is you were not able to clear off the debts, then you should make plans on paying the debts off.
- Try signing up for programs that may help your alternative payment behavior. With the help of Experian Boost, which is a free program that is connected to the account that shows how you pay your expense, phone, and video streaming plans.
- Now if you get a credit card you must try as much as possible to spend wisely and responsibly. If you want good credit card growth then you need to have good payment behavior. And you cannot have good payment behavior with a bad spending attitude.
Credit Card
In the aspect of description, the credit card is a thin rectangular piece of plastic or metal issued by a bank or financial services company that gives the cardholders the privilege to borrow money or funds to be able to pay for goods and services to dealers that accept credit card as a means of payment.
Credit card issuers are capable of charging a high APR which is the abbreviation for annual percentage rate. Interest is to be given if a credit card owner exceeds the time of payment. By law, it is discovered that those who issue cards are to give a minimum of 21 days’ grace.
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Credit Score
This is a term associated with a Credit card. This is the prediction of how you are capable of paying back a loan on time. This is marked from the information you submitted as credit reports. This is viewed with your monthly payments, your expenses, and other options you have outlined on the credit reports.
How to get a Credit Card
Here, we are going look at ways possible to get a credit card or steps to getting a credit card.
- Before getting anything you need a reason for getting it, so you need to have a reason for getting a credit card.
- Check your credit score.
- Inquire and find out the best credit card offers.
- This comes after when you have finalized your decision of getting a credit card. Make sure to read the fine print. The fine print on your credit card agreement informs you of the circumstances that come up when a penalty APR is triggered and there is the penalty rate you pay when you make a mistake.
- Lastly, make sure to apply for the credit card that suits your needs.
Getting a Credit Card after Bankruptcy
There are some of the decisions you should take before going credit card.
- Make sure to monitor your credit score.
- Access your options.
- Rebuilding your credit with a credit card.
- You must try to pay off your debt fully before going for a credit card.
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Credit Card to Apply for after Bankruptcy
After bankruptcy, you would need the right decision of credit card for rebuilding from bankruptcy. Every credit card comes with its benefits so must try to know about them before you apply for any credit card.
- Secured Credit Card: is designed for people who would love to rebuild their credit after bankruptcy. Before getting to use the secured credit card you would be required to pay a deposit of $200 which is the credit line. There are no annual fees attached to this card, there is a 2% cash back at gas stations and restaurants and you can earn unlimited 1% cash back on purchases, Credit activity is reported to three credit bureaus. The ability to apply for pre-approval.
- Another good choice of a credit card after bankruptcy is the Capital One platinum secured credit card. This credit card is promoted with a rebuilding credit level. This credit card requires a deposit of $49, $99, or $200, you can earn a credit line of $200 but this depends on the terms of the offer. Other features of this credit card are a $0 annual fee, no foreign transactions, replacement card or authorized user fees, and the ability to apply for pre-approval.
- There is also the OpenSky secured visa credit card: Your credit history would not affect your application for this credit card. This card is owned by Capital bank. You would need a deposit of at least $200 to be able to apply for this credit card. This card can be used for all purchases you desire to make. There is an annual fee of $35. Other features like the visa network benefit, and fraud protection and it is accepted worldwide, and it reports its credit activity to major credit bureaus.
- Credit one bank platinum visa for rebuilding credit is another rebuilding option after bankruptcy. There would be a thorough check on your credit line to know if you are eligible for the credit card. The least credit line you would be given is $300. There is an annual fee of $75 for the first year. After the first year, there would be an $8.25 annual fee. Other features are cash-back rewards depending on eligible purchases and there is the ability for pre-approval.
There is something you must put in mind. That those credit cards for cardholders with poor credit have higher APR. And you could also avoid interest by paying off your balance every month.
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FAQ
Will Capital One re-approve me after bankruptcy?
Will capital one approve me after bankruptcy? The answer is NO. Capital One would not consider individuals with unsolved bankruptcy. So before your Bankruptcy is resolved or solved properly before applying for the Capital One credit card.
How fast can I raise my credit score after chapter 7?
It takes time to rebuild your credit score so you have to be patient. But it takes from two months to two years for your credit score to improve. At times it depends on how much you want your credit score to be improved. You must try to build responsive credit habits.
What Credit Score is the highest?
The highest credit score is 850 while the lowest score is 300. These are scores are gotten from VantageScore and baseFICO score models.
What Credit Card is the Best Choice after Bankruptcy?
The best credit card choice is the decision one would want to know after bankruptcy. Well, the best choice for a credit card is the Discover It Secured credit card which comes with ample rewards and no credit score required to apply.
How many Credit Cards are Supposed to have?
Towards the goal of getting and maintaining a good credit score. You should probably get two or three credit card accounts. This decision should help you improve your credit mix. Lenders and creditors love to a different credit types on your credit reports.
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