Finding The Best Credit Card After Bankruptcy
You can find credit cards for bad credit, balance transfers, low interest rates, and many more but finding the best credit cards after bankruptcy is quite difficult, but not impossible. A few years back who would have though that there would be credit cards that you can use after going through bankruptcy. Today, it is a totally different card market where you can find a credit card for any purpose. The first question most people ask after bankruptcy is whether they should apply for a secured credit card or an unsecured card.
First let us understand the difference between secured and unsecured credit cards. A secured card is called so because it is secured with the help of a savings account. You have to establish this savings account with the credit card issuing bank or company. The savings account is like collateral. Let us take an example to explain it better. If you open a special savings account by depositing £500 then your credit limit will be £500. If at any point you default on your payment then the issuing bank or company will deduct it from your special savings account.
On the other hand unsecured credit cards are not as secure. You don’t have to open any special savings account. All you have to do is fill an application form and depending on your credit record and income proof, you will get an approval and finally the unsecured credit card that will carry a specific credit limit. Now let’s see which one is the best for those who have gone through bankruptcy. The truth is that it all depends on the kind of credit history you had before filing for bankruptcy. A fact: If you apply for a secured credit card then the chances of your application getting approved is much higher as against an unsecured credit card.
But then if you are in the market shopping for a credit card against bankruptcy then you need to be extra careful. You can’t just apply for any secured credit card. We again come back to the question which is how can you find the perfect card after bankruptcy? So, let’s look at it this way: If you are applying for a secured card then there are 8 points that you need to consider. The 8 points will help you to narrow down your search and help you make an informed decision.
The eight points of consideration are interest rate, application fee, annual fee, other fee, rewards, discounts, purchase protection, and theft protection. Some secured cards offer a zero percent interest rate initially but after 3 months or 6 months, they jump to 14%. No point going for such a card. You will probably do better if you stick to a card that charges you less than 10% annually. Choose a card that won’t charge you application fee. Most cards have no annual fee for the first year or for the life of the card. So that is taken care of. Check the kind of rewards and points that can be redeemed. Purchase discounts are quite important because they will help you save money after bankruptcy.
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