Getting a credit card is one of the first steps to rebuilding your credit after bankruptcy. But how do you find a credit card that will help your financial situation and not hurt it? What does a “good” credit card really look like?
Low Interest Rates
The best credit cards have low interest rates. For borrowers with excellent credit, zero percent interest is often offered as an introductory rate. A good credit rating will get you an interest rate of about 8-9%. If you’re just coming out of bankruptcy, you can expect “good” credit card offers to range anywhere from 12-16% APR, and that depends on how much work you’ve already done to rebuild your credit history. For example, a secured credit card right after bankruptcy lays the foundation for getting better credit card offers.
No Annual Fees
The best credit cards have no annual fees. While some credit cards that offer lower interest rates have annual fees, you’ll need to decide if the trade-off is worth it for you. Generally speaking, if you plan to hold a balance, a low interest rate is better and having an annual fee may be worth it. However, it is possible to get both a no annual fee and low interest rate credit card.
The best credit cards offer a variety of rewards such as cash-back, rebates, and points towards purchases. Check out a credit card’s rewards program to see how it measures up against the competition.
A good credit card will offer an easy and cheap (preferably free) way to transfer a balance from your old credit card onto the new card. If you’re holding a balance on a high interest credit card, transferring your balance to a low or zero-interest card could save you thousands of dollars, especially if you have a solid plan to pay it off.
To find the best credit card offers, you need to keep an eye on current interest rates and decide which credit card rewards and benefits work best for your post-bankruptcy lifestyle.