Getting a credit card after bankruptcy

If you want to rent a car, reserve a hotel room or buy something
on the internet a credit card is almost a necessity today.

When it comes to applying for a credit card one question that a
lot of people seem to have is: Should I apply for a secured
credit card or unsecured credit card?

In case you don't know the difference, a secured credit card is
"secured" by a special savings account you establish with the
lender which acts as collateral for your credit limit.

For example, you deposit $500 in the special savings account and
then have a $500 credit limit. If you default, the credit card
issuer simply takes the money in your special savings account.

Unsecured credit cards are just that - unsecured. Meaning the
person fills out a credit application and, based on their credit
situation, they are approved for a certain credit limit. Of
course, they could also be declined depending on the credit card

issuer's guidelines.

So which is best? It depends on your credit history. However,
if you apply for a secured credit card you have a higher chance
of getting approved versus an unsecured credit card.

But be careful. Not all secured cards are created equal. And to
make matters worse, there are tons of banks out there pushing
secured credit cards!

So how do you choose? You can come up with a list of criteria
that the secured card needs to meet in order for you to consider
it.

When I'm researching secured cards, I apply eight criteria. Not
many meet these criteria so I'm able to narrow down the choices
quickly.

What are the some of the eight criteria? For example, a low
interest rate is important. While researching some secured
credit cards I ran across one with an interest rate of 23.99%
and another with an interest rate of only 9.25%.

This is just one of the criteria - and look at the potential
savings! Over several years you could save $100s or even $1,000s
in extra interest depending on the balance amount you maintain.

Okay, here's another criteria: application fees. Again, I found
some secured credit cards that have no application fees and one
that had a... are you ready for this... $120 application fee! Sadly,
people have paid it!

Let me give you one more criteria: You want to make sure the
secured card issuer reports to all three credit bureaus. But you
also want to make sure they report it a certain way.

I don't have room here for all eight criteria, but hopefully
this gives you an idea of some of the things you need to look at
when shopping for a secured card.

By the way, don't apply for too many credit cards at once. If
you do, it can hurt your credit score. That's why if you're
uncertain as to whether or not you'd be approved for an

unsecured credit card it may be better to apply for a secured

credit card.

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