Credit Cards for Bankrupt Individuals
Filing for bankruptcy doesn't preclude an individual from getting a credit card, but it doesn't make it easy. If the purpose of getting a credit card after bankruptcy is to rebuild credit, advisers suggest starting with something like a department store card to establish a payment track record. There are a few places that will issue an unsecured credit card to a bankrupt person, but the costs of owning such a card can be extreme.
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Capital One Secured Credit Cards
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Capital One has a secured MasterCard® and does not charge application or processing fees. The initial security deposit is fully refundable, and depending on the amount of the security deposit, you can get a credit line of as much as $3,000. This card has an annual percentage rate of 22.9 percent and a basic annual fee of $29. By establishing a good payment history with this card, you can qualify for credit-line increases without an additional security deposit.
Orchard Bank Classic Cards
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Orchard Bank offers an unsecured card with an annual percentage rate of either 14.90 percent or 19.90 percent. It has an annual fee ranging from $29 to $59 during the first year, and $39 to $59 in subsequent years. The APR, fees and processing charge of $0 to $39 depend on your current credit rating. If your credit was excellent or good before the bankruptcy, you would most likely qualify for the lower rates. An APR of 7.90 percent is available for a secured card through Orchard Bank with a flat annual fee of $35 after the first year and a minimum security deposit of $200. Whether secured or unsecured, there is a variable cash APR of 20.90 percent and a $5 charge for cash advances or balance transfers, plus a 29.49 percent late payment fee.
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First Premier Bank Credit Cards
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Get a credit card through First Premier Bank with a credit limit of $300 initially. They will deduct the first year's annual fee of $75 from that amount so the initial card balance will be $225. Each subsequent year, the annual fee is $45 and there is a monthly service charge of $6.50. They charge a whopping APR of 49.9 percent for purchases and cash advances, so if you use the entire $225 balance on the card, you will have to pay back the $225 plus $112 or $337. The bank assesses the greatest of 3 percent or $5 as a transaction fee on cash advances to a maximum of $10 after the first year.
AccountNow Prepaid Debit Cards
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The AccountNow card offered by Bancorp Bank does not provide a line of credit for its customers. There is a one-time activation fee of $4.95, but many other services are free. There is no monthly service fee, no fee for adding money to the card, whether in cash or by card-to-card transfers, no fee for "alerts" on your balance or when you make deposits to your account. There is a $1 fee to make purchases using your PIN or your signature and to check your balance at an ATM.
The UPside Card
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The Upside Card offered by Meta Bank is a prepaid debit card that has no yearly fee and no charge when making purchases. There is a monthly maintenance fee of 99 cents if $500 is loaded onto the card each month, or $2.99 for less than $500 monthly. Card-to-card transfers are $2.80 and you can only load $300 at a time. There is no charge for loading the card using direct deposit and no declination fees.
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