After
going through the process of filing bankruptcy, it is easy to have a range of
emotions about credit cards. First, it is easy to view credit cards as the evil
that caused the bankruptcy in the first place. Even if the reason for the debt
was due to the lose of a job, or an emergency where cash and supplies was
needed, it is a normal response to never want to use credit cards again.
Then, after getting through the initial disgust with credit and credit cards,
the feeling changes to concern. It is easy to be reminded that our modern lives
are very difficult without at least one credit card.
Well,
the reality is that people can get credit cards after a bankruptcy. In fact,
there is an entire segment of the credit card industry that actually seeks out
individuals with credit problems. The only problem that individuals with credit
issues have is sometimes finding those companies that will give them credit
cards. As with so much else, it is having the right information that can
separate a person from having access to credit to not having credit at all.
Orchard Bank/Household Bank
In
order to qualify for one of these cards, you typically need a household income
of $12,000 per year, a household phone, and a valid social security number. In
addition, if you have recently filed for bankruptcy, the bankruptcy usually
must be discharged for at least 6 months.
With
the Household Bank/Orchard Bank Mastercard, you will usually receive an initial
credit limit of $300 to $500. The card will typically not come with a monthly
membership charge, but does have a yearly charge of around $75.00 to $80.00.
The
great thing about this Mastercard is that you are eligible for a credit limit
increase after 6 months of having on-time payments, and not going over your
available balance. In addition, Household Bank/Orchard Bank will report your
payment history to the three major credit bureaus. So, after using this card
successfully for 6 months to 1 year, you will raise your credit score, and your
ability to get other types of credit cards.
Now,
the downside of this card: the interest rate. As you probably have imagined, a
card that is marketed toward individuals with credit issues is going to have a
very high interest rate. In fact, the interest rate on this card usually varies
from 18% to 21%. Of course, if you ever miss a payment or are late on a
payment, then the interest rate increases to about 25%.
Rewards 660.
When
you are approved for the card, there is a $99 setup fee, and a $95 program fee.
In addition, there are two recurring fees with this card: a $48 annual fee and
an $8 monthly participation fee. When you receive the card, the initial credit
limit will be $300, but the available credit with only be $50 due to all of the
fees.
Now, the upside to this card is that you are able to get a $100 credit limit
increase after only 3 months of on-time payments, and by not going over the
available credit limit. However, this relative ease of increasing your credit
limit does have a downside: a credit limit increase fee. Yes, every time that
the credit limit is increased by $100, a $25 fee is imposed. As you can easily
see, this card is very heavy on the fees.
In
order to qualify for this card, you must be at least 18 years old. In addition,
you must have a monthly income of $1,000, have a valid social security number,
and not be a Wisconsin resident. This credit
card is not available in Wisconsin.
Finally,
it should also be noted that this card does come with a higher than average
minimum monthly payment. The Rewards 660 card requires a minimum monthly
payment of 5% of the current balance, or $40.00, whichever is greater. The
reason they require at least a $40 payment per month is that the outstanding
balance is reduced more quickly.
Aspire
The
fees that will be subtracted from your initial credit limit include a $150
annual fee and an account opening fee of $29. In addition, you will also incur
a monthly maintenance fee of $6.50.
One
thing that is different with the Aspire Visa card from other cards is that you
must make a payment before you can activate the card. When you receive the card
and call to activate it, you will be required to make an initial payment of
$20.
Finally,
the interest rate on this card is much the same as other cards targeting those
with credit problems. The initial rate will be around 20%, but can go upwards
of 25% if you default on a payment. In addition, if you use the card for cash
advances, expect an interest rate on the cash to be upwards of 31%!
First Premier/Centennial Cards
As
with the other cards, the requirements to apply for the cards are identical. In
addition, the fees with this card can be steep. The initial credit limit will
be a minimum of $250, but will be reduced by a $48 annual fee, a $29 set-up
fee, a $95 program fee, and a monthly participation fee of $6. If you receive
the card, the initial credit limit will be $72.
As
with the other cards, you will be eligible for a credit limit increase in 6
months. The increase is given to those who have stayed within their credit
limits, and made on-time payments.