Q: I filed bankruptcy in March 2011, and it discharged in June. I am not working, but receiving workers' compensation. Can you recommend a credit card?
Based on that time frame, I'm assuming you filed Chapter 7 rather than Chapter 11 or 13 bankruptcy. That means your discharge has eliminated all your debts, except those tied to the IRS, student loans, and any car or auto loans you've negotiated with lenders.
Because you're not allowed to file bankruptcy again for many years, you're actually less of a risk now than you were before March, and you aren't necessarily limited to secured cards. Therefore, you'll qualify for some of the same credit cards for limited credit as an applicant with a "thin" credit file.
Capital One Platinum Credit Card. By the banking industry's standards, Capital One remains a young upstart. When encountering a case like yours, Capital One uses its own algorithms to assess risk instead of just relying on your credit score. This "plain Jane" card comes with a low annual fee and a high APR, but will save you plenty of money compared to the predatory deals you'll receive in the mail after a bankruptcy.
Citi Secured MasterCard. If you can afford to deposit at least $200 in a savings account, you may want to consider Citi's affordable secured credit card. You'll earn a competitive interest rate on your security deposit, while enjoying access to a MasterCard that comes with purchase protection, identity theft monitoring, and a host of other features than can help you give structure to your personal finances.
If you qualify for an unsecured credit card, don't expect a very large credit limit, even after you improve your credit score. Under recent rule changes, banks must consider your ability to repay a debt when approving your credit. At this point in your financial life, interest rates don't matter because you'll only be using your new credit card to carry a balance no bigger than the cost of a Happy Meal. Use your card for anything more, and you'll risk hurting the credit score you need to rebuild.
- I am looking to establish good credit so I can buy a home for my family. What kind of credit card should I start out with?
- I'm a 22-year-old female who makes about $1,000 a month. I have a credit union credit card with credit line of $500. I recently applied for a Lowe's credit card and was denied. I'm always on time with my credit card payments. What would be the reason?
- I am an 18-year-old with no credit history. I have read Curtis Arnold's book and am successfully paying my community college tuition on my own. Which card is best suited for me when I only plan on using my future card for gas purchases?