Bankruptcy Credit Card: How Choose One
By R. Lawrence Anderson -

There are many credit card issuers out there promoting what some people refer to as “bankruptcy credit cards” – that is, credit cards for people who have a on their credit report.

Of course, these credit card issuers target individuals with poor credit in general, not just those with bankruptcies – but for the purpose of this article, we will use the term “bankruptcy credit card”.

Most of the credit cards you see advertised are secured credit cards. If you are not familiar with a secured credit card, it’s “secured” by a special savings account you establish with the issuing bank which acts as collateral for the line of credit you receive with the credit card.

So how do you go about choosing a “secured” credit card? The first step is to come up with a list of criteria. In After Credit Solutions I cover eight criteria you can use. When I apply the eight criteria, only a handful of credit cards are left – so it narrows it down to the better ones quickly.

There’s not enough space here to cover all eight of the criteria I use when selecting a credit card, so let’s focus on a few of them as a starting point:

1. Has Reasonable fees

What’s reasonable? Well, while researching some credit card issuers I came across one that charged a $120 application fee. Compare this to a number of others that charge no application fee at all! But that’s only part of the picture –you also want to make sure the credit card issuer offers an interest rate that is competitive with other issuers. This where comparison shopping, and making sure you are aware of every fee the card issuer charges, is critical.

2. Reports to the major credit reporting agencies

This is very important – if you want to rebuild your credit history, make sure the issuer of the credit card reports to the major credit reporting agencies: Experian, Equifax, and Trans Union. You also want to make sure the information is reported a certain way – in After Credit Solutions, I go into detail on this.

3. Reports credit limits

Why is this important? If the credit card issuer does not report your credit limit, this could lower your credit score with some credit scoring models because they may automatically assume you are at your limit – even if you are using only 10% of the available credit line.

We’ve only touched on three of the eight criteria I cover in After Credit Solutions. But, at the very least, it should give you a starting point when it comes to choosing a credit card.

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R. Lawrence Anderson is author of After Credit Solutions, which shows individuals how to qualify for credit and loans after - including how to select a bankruptcy credit card.