Suppose you are considering applying for a credit card after having gone through bankruptcy. In that case, the best advice is to apply for secured credit cards that initiate collateral usage for the credit card application other than using for unsecured credit cards.
Have you ever wondered how secured and unsecured credit cards differ from one another? You know the word itself reserves secure credit cards while the unsecured credit cards are unsecured. The secured credit cards use your savings accounts as collateral, usually starting from five hundred dollars or more that the credit card issuer used to determine credit limits for you. As mentioned, it is used for collateral purposes if there is a default in payments. For instance, in your savings accounts, you have the amount of $500 dollars that can be used as collateral for possible problems that are most likely to occur, resulting in default payments. When you default, the card issuer automatically deducts your savings account fees to pay for the credit card.
Unsecured credit cards are also an option for those in need of a credit card, but applying them may be difficult due to related bankruptcy problems. In using unsecured credit cards, you must fill in an application form based on your income, credit report, and other necessary information stated on the application form that credit card issuers need to approve your credit card application. These credit cards are approved with credit limits based on your income and credibility. Although applying for an unsecured credit limit does not entirely mean that you are qualified for the unsecured credit card. Instead, applications are based depending on the credit card issuer’s guidelines too.
In cases like bankruptcy, applying for secured credit cards are best. Besides, unsecured credit cards depend on your credit history, lessening your chances for unsecured credit cards. The moment the credit card issuers learn you have a bankruptcy record in the file, the issuer will be questionable and may not grant you a credit card. On the other hand, applying for secured credit cards have higher chances of getting a secured credit card. In contrast, unsecured credit cards are difficult to use due to credit reports such as bankruptcy.
Many companies offer secured credit cards that you may consider significant, but the truth is all secured credit cards can be strenuous and could cause trouble for you. Secured credit cards are not all the same; therefore, consider researching the different types of secured credit cards in limiting your choice by applying for the best credit cards. There are some criteria mostly crucial before applying for secured credit cards.