Would you want to know what the best credit card after bankruptcy is? You and most people know that it is important to rebuild credit after filing for a bankruptcy.
Most people even want an easier and readily available way to rebuild credit in order to get back on track faster. Consequently, it is widely accepted that credit cards are the quickest way to build credit.
But, are there really credit cards available after a bankruptcy? Are banks still willing to offer credit cards to those who have file for bankruptcy?
Do not despair because credit card issuers understand that the present worldwide economic situation make people susceptible to bankruptcy. So, a credit card after bankruptcy is stillavailable if you are able to make your record right.
A recent study made by an associate professor at the University of Iowa showed that ninety six percent of the people interviewed for the research were offered in their first year with new credit after filing for bankruptcy.
However, don’t be overjoyed with this information because usually, applicants from bankruptcy will get higher interest rates than those with good credit history.
Higher Interest for Higher Risk
Why is possible that the best credit card after bankruptcy has high interest?
Commonly, the insufficiencies of laws on usury in most states where banks are headquartered enable the banks to charge tremendous interest rates for credit cards.
Therefore, applicants who just came from bankruptcy or those with bad credit histories will likely be charged with steep interest rates.
The number one principle of banking is “Interest Rate equals Risk” which makes banks experts at risk management. Thus, if you are a high risk, you will get high interest rate.
The only consolation that you can have is the availability of a credit card even if you are a high risk.
So, if you receive an offer for a credit card, it does not necessarily mean that you will get a card. It is because when you apply, a copy of your credit report is pulled. If you filed for bankruptcy, the bank will discover.
As I have mentioned earlier, you can still get approval for a credit card, but the card will carry a very high interest rate.
The Best Credit Card after Bankruptcy
So, what really is the best credit card after bankruptcy if you do not want tremendous high interest carrying credit cards?
The best credit card for you after filing for bankruptcy is a secured credit card. Why? It is because a secured card is backed by a deposit that you make.
Therefore, you will pose lesser risk to the card issuer should you fail to make payments. Your credit limit is covered by the deposit you make and interest rates are lower than getting an unsecured credit card.
After bankruptcy, you can either be out of debt or go back into indebtedness again.
The best credit card after bankruptcy for you could be a secured card or an unsecured card such as Orchard Bank Classic MasterCard.
What matters is that you are able to use the after bankruptcy credit card efficiently in order not to get back to bankruptcy.
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