Q: I currently have a credit score of 688 and was discharged from a Chapter 13 in November 2011. What is the best credit card for me?
Congratulations on getting your bankruptcy discharged. It’s one of the most challenging steps you’ll ever take toward long-term financial health. It’s difficult, but not impossible, to get a credit card after bankruptcy as long as you manage your expectations.
You didn't mention the reasons behind your bankruptcy, but the fact that you discharged a Chapter 13 case signals that you've managed to keep your monthly bills under control for the past few years. With your case closed, you can start investigating new lines of credit.
Even though you are starting fresh, your credit report will carry a note about your bankruptcy for as many as ten years. Some credit card companies won't process your application if a Chapter 7 or Chapter 13 filing shows up on your file. However, a few banks specialize in using broader criteria for determining whether you're eligible for an unsecured or a partially secured credit card.
- Capital One Platinum MasterCard or Secured MasterCard. Capital One has long relied on its own consumer database to enhance its underwriting decisions. The bank offers a credit card for fair credit with an application process that will offer you a partially secured MasterCard if you're not yet ready for an unsecured line of credit.
- Wells Fargo Secured Visa Card. To complete its takeover of Wachovia, Wells Fargo pledged to maintain affordable consumer lending options. That's one reason why their secured Visa card carries one of the lowest annual fees on the market. You'll need to link that card to a Wells Fargo checking and savings account, leaving at least $300 on deposit.
- Navy Federal nRewards Secured Visa. If you or your spouse have ever served in the military, you can qualify for Navy Federal's secured rewards credit card. With no annual fee and rebates of up to 1 percent, you can rebuild your credit while enjoying the perks that most folks won't get until their credit score tops 720.
Whichever card you choose, you'll want to keep your balance as low as possible. Adding an unsecured credit card to your portfolio makes it easier to travel and to shop online, but too high of a monthly balance can upset the credit utilization banks see on your credit report.
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