If you have filed for bankruptcy recently, you may be thinking of the options, and if you can get a secured credit card to use after bankruptcy. To be realistic, one may not qualify for a secured credit card for some loans, but if you get one after bankruptcy it can help rebuild your credit and get a good credit score before the bankruptcy fades off the credit report.
What’s a Secured Credit Card?
Secured credit cards haven’t always been very easy and satisfactory in the recent years because some don’t help you rebuild your credit. A secured credit card actually is a second chance card.
When you get a secured credit card, you have a savings account linked for the card. The limit of the card is the amount of money in the account. You can not exceed what is in the account. Payments are sometimes taken out automatically from this account.
Believe it or not, secured credits usually have a much better deal than an unsecured credit card. The limit is usually very low, normally ranging from $200 to $500, but this will keep you from having a difficult time being able to pay off the card. The bonus is that this limit will be increased with your credit score or many months of consistent payments.
Getting the Card
When you sign up for a secured credit card you should consider a few things before you decide to get one. Make certain that the secured credit card has no fee upon application, and a that it has reasonable annual fee. Many cards, especially the second chance cards, have huge up front and annual fees, and these might take up the credit limit of your credit card. Paying on these fees don’t even count towards your credit score.
Make sure that the card reports to all three major credit bureaus. If you are keeping track with your payments, but the card doesn’t report to these bureaus then you aren’t building your credit back up; and since the cash you spend on your card is your own money anyhow, there really isn’t a point in a card that doesn’t report.
Ask if the card can be converted to an unsecured card if you’ve been on time with your payments after twelve to eighteen months. Several banks will let you to do this – it will just depend on the programs available.
Where Can You Get a Secured Credit Card?
Being part of a credit union can help you acquire a secured card. Each organization handles things variedly so you need to ask if your credit union offers one. A bank may offer one as well.
You can also go to straight to a credit card company that has secured cards. There are a lot of them online to choose from, and you can fill out the application right over the Internet. There are times you will know after just a few minutes if your application is approved, and sometimes you will have to wait for approval in the mail. Just be sure that you read all the fine print and know all the details before getting one. Remember, just applying for a credit card affects your credit and knowing the pros and cons are important.
