Is It Possible to Get Credit Cards After Bankruptcy?

Why Getting Credit Cards After Bankruptcy Is So Important

To understand why it’s so important to get credit after bankruptcy, let’s start by clearing up a common myth.

Myth: Bankruptcy ruins your credit forever.

The truth is, bankruptcy actually gives you a chance to rebuild. It clears the slate so you can start paying your bills on time, and that’s the key. The credit-scoring formula puts far more weight on what you’re doing now than on what happened in the past. So if you’re making on-time payments today, your score can start climbing quickly.

A lot of people walk away from credit entirely after a financial crisis like bankruptcy. This is understandable, but it’s also a mistake. If you don’t open any new accounts, the credit bureaus have nothing current to measure. That means your report will only reflect the negative history, and your score won’t improve.

But when you open new credit accounts and use them wisely, the credit bureaus finally have something positive to report. And that’s when your score starts to rise.

So yes, you can get credit cards after bankruptcy. And yes, you should!

Open Credit Cards

We know it might feel counterintuitive. After all, why would anyone who just went through a financial meltdown want to open a credit card?

Here’s the thing, though … this isn’t about debt. It’s about rebuilding trust with lenders and credit bureaus.

How to Rebuild Your Credit Score

Think of it like this: Imagine you’re in high school and failed a few tests early in the semester. Your GPA takes a hit. But then you buckle down, study hard, and start earning A’s. What happens? Your GPA climbs, and you might even end the semester with a 4.0.

Your credit score works the same way. You can’t erase the past, but you can add better data. The best way to do that is by opening new lines of credit and using them responsibly. That’s why we recommend opening three credit cards and one installment account after bankruptcy.

This article focuses one opening new credit cards. If you’re curious about installment accounts, check out the Credit Rebuilder Program.

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Which Credit Cards to Open … And Which to Avoid

That said, not all credit cards are created equal. In fact, some might hurt your score rather than help. In general, you want to open major revolving credit cards (Visa, MasterCard, American Express, Discover) that report your correct credit limit to all three credit bureaus.

When opening new credit cards, don’t:

• Open retail store cards (like Macy’s or Best Buy): These often trap people in debt with high interest and low limits. Plus, why open a credit card that you can use at only one location when you could open a major revolving credit card that you can use at every location?
• Don’t count your debit cards: It’s fine to have debit cards. We all need them. But these cards will not be reported to the credit bureaus since you don’t pay bills or make payments toward them.
• Open cards that don’t report to all three bureaus: Nearly 46% of credit cards either fail to report to all three bureaus or fail to report your limit. Both of these problems can sabotage your score.

Here is a list of credit cards that report the proper limit to all three bureaus

Choosing Between Secured and Unsecured Credit Cards After Bankruptcy

When opening credit cards after bankruptcy, you have three options:

Option 1: Open a traditional credit card

The terms you receive on a traditional credit card will depend on your credit score. If your score is high, you’ll likely qualify for lower interest rates and perks like airline miles, hotel rewards, or cash back.

But if your score is low, expect higher interest rates and annual fees. That said, here’s something that surprises a lot of people …

If you pay your credit card balance in full each month, you can avoid paying interest.

So even if the interest rate is high, it may not matter, as long as you pay your balance in full each month. And once your score starts to rise, you can renegotiate the terms or switch to a better card altogether.

Option 2: Open a secured credit card

Secured credit cards are a popular option for people rebuilding after bankruptcy. Here’s how they work ..

You make a deposit—let’s say $250—and that becomes your credit limit. You still need to make regular payments, and your deposit isn’t applied toward your balance. Instead, you’ll get the deposit back when you close the account, assuming you’ve paid off the card in full.

This might sound like a bad deal, but these cards are often easier to get than traditional credit cards, and they help you rebuild your score. After 12 to 24 months of on-time payments, you’ll be in a better position to upgrade, and you’ll get your deposit back.

Here is a list of credit cards that are most likely to approve applicants with poor credit. These are cards that report to all three major credit bureaus and reflect your actual credit limits, both essential for rebuilding your score.

Option 3: Become an authorized user

Another way to jumpstart your credit rebuilding process is by becoming an authorized user on someone else’s credit card. This means a trusted friend or family member adds your name to their account, and their positive payment history gets added to your credit report, even if you never use the card.

If you know someone with a strong credit history who keeps their balances low and pays on time, it’s worth asking if they’d be willing to add you as an authorized user. And if they’re worried about giving you access to their credit, you can assure them that you don’t need the physical card. They can simply add your name without handing over any spending power.

This is a great way to build your credit without taking on any new debt or paying interest and fees. But a quick heads-up: if the person misses payments or carries high balances, their activity could hurt your score. The good news? If that happens, you can simply ask to be removed from the account, and your score will typically revert, removing the negative impact.

Still, if used the right way, becoming an authorized user can give your credit the boost it needs, helping you qualify for your own credit cards down the line, with better terms and lower rates.

A Tip for Opening Credit Cards After Bankruptcy

This advice might also be counterintuitive, but here goes …

When it’s time to open credit cards after your bankruptcy, try to open them all at once. Here’s why: one factor that affects your credit score is the age of your accounts. The sooner you open new credit cards, the sooner they can start aging and working in your favor.

But if you open one card now, another in a few months, and a third sometime next year, each new account will lower the average age of your credit history. Opening them all at once gives your accounts time to mature together, which helps your score in the long run.

How to Improve Your Credit Score with the Credit Rebuilder Program

How to Use Your Credit Cards to Build Credit

Opening credit cards isn’t enough. You have to use them wisely. Follow these four rules to make sure your new credit cards actually help your score:

1. Keep them active. Use each card for one small, consistent bill each month. Aim for something under fifty dollars, like a subscription or a utility payment.
2. Pay them off in full. Try not to carry a balance. When you pay your statement in full each month, you avoid interest charges completely.
3. Stay under thirty percent of your limit. Even if you pay your balance off every month, try not to let your balance go above thirty percent of your credit limit at any time. Credit-scoring bureaus pay close attention to your balance-to-limit ratio. If your balance gets too high, even for a short time, it can signal financial stress and lower your score. Keep your balance under thirty percent, and closer to ten percent if possible.
4. Never miss a payment. One late payment can undo a lot of progress. If you’re having trouble making a payment, call your credit card company before the due date and ask for an extension. Many companies are willing to work with you if you reach out in advance.

If You’re Married, Apply Separately

If you are married, each spouse should apply for three credit cards after bankruptcy in their own name. Do not apply jointly. Why?

Because unexpected events can impact your finances. Job loss, medical bills, or other emergencies can make it hard to keep up with payments. If all credit cards are joint accounts, a single crisis can hurt both credit scores at the same time.

On the other hand, building credit separately gives couples more flexibility and protection.

Take Joe and Robin as an example. Imagine Joe loses a job, and Joe and Robin’s household can no longer afford to pay all the bills. If Joe and Robin have joint credit cards, missed payments will damage both of their credit scores. But if they each have their own accounts, they can make a strategic decision to prioritize Robin’s bills. Joe’s accounts might temporarily fall behind, but Robin’s credit will stay strong.

That strong credit score can help the couple qualify for a car loan, refinance a mortgage, or access lower interest rates if needed. It gives them options during a difficult time. When Joe is ready to rebuild, Robin can add Joe as an authorized user on one of her credit cards. This gives Joe a boost from Robin’s positive payment history and makes it easier for Joe to start improving his own score.

By building credit separately and opening three new credit cards each, Joe and Robin protect their household from future setbacks and set themselves up for a faster recovery if challenges arise.

Open Three Credit Cards

Final Thoughts: You Can, and Should, Get Credit Cards After Bankruptcy

Getting credit cards after bankruptcy is essential. It’s the first and most important step to rebuilding your credit and regaining your financial freedom.

If you follow the right steps, avoid common traps, and use your cards responsibly, your score can rise, sometimes dramatically, in just 12 to 24 months.

So don’t wait. Visit www.720CreditCards.com, pick the cards that work for you, and start building the future you deserve.