Secured credit card after discharge

[dieselman]

I've just paid off my Ch 13 early and now awaiting for the discharge and closure.

What is the best secured credit card to get to begin the rebuild?

[justbroke]

If you can get into Navy Federal (NFCU) then I would do that. Otherwise, a credit union (CU) is a good place to get a secured card. I would not use Wells Fargo as they still check credit for a secured card. Be sure to ask if the card "graduates" after a certain period of time. Some issuers will graduate the card to unsecured status after 7 months or 11 months.

I used a secured card from First National Bank of Omaha, aka FNBO. FNBO graduates after 11 months. They used to offer a secured VISA or American Express, but they no longer have the AMEX product. In fact, they just sent me a letter telling me that they're moving my card to a VISA.

Some people have issued Discover It secured (about 8 months graduation).

I think the best issuers are usually the CUs. I actually received unsecured from NFCU after I refinanced my car loan through them. That card now has a $25K limit. They have rules, now, about receiving unsecured cards right after bankruptcy. I think the new rule is 6 months or something like that. Again, if you can get into NFCU, then go for their secured card.

[shipo]

In addition to what justbroke wrote, if you live in the eastern third of the United States, TDBank has a good secured card with a 6-month graduation. If you can live with a maximum of a $1,000 limit, CapitalOne has a secured card which is really easy to get but has a fuzzy path to graduation.

FWIW, I had both of the above cards, I opened the CapOne first, hated it because of the low limit, and closed it after 6-weeks. I then opened up the TDCash card, a 1% rewards card while secured, with a $5,000 limit and used it for exactly 6-months before it graduated to an unsecured card with a $5,000 limit.

[dieselman]

If you can get into Navy Federal (NFCU) then I would do that. Otherwise, a credit union (CU) is a good place to get a secured card. I would not use Wells Fargo as they still check credit for a secured card. Be sure to ask if the card "graduates" after a certain period of time. Some issuers will graduate the card to unsecured status after 7 months or 11 months.

I used a secured card from First National Bank of Omaha, aka FNBO. FNBO graduates after 11 months. They used to offer a secured VISA or American Express, but they no longer have the AMEX product. In fact, they just sent me a letter telling me that they're moving my card to a VISA.

Some people have issued Discover It secured (about 8 months graduation).

I think the best issuers are usually the CUs. I actually received unsecured from NFCU after I refinanced my car loan through them. That card now has a $25K limit. They have rules, now, about receiving unsecured cards right after bankruptcy. I think the new rule is 6 months or something like that. Again, if you can get into NFCU, then go for their secured card.

I have a bit of a sour taste on CU's. The CU i had my truck loan and a credit card through made Tony Soprano and his crew look like girl scouts in my BK13.

Is Open Sky good?

[dieselman]

In addition to what justbroke wrote, if you live in the eastern third of the United States, TDBank has a good secured card with a 6-month graduation. If you can live with a maximum of a $1,000 limit, CapitalOne has a secured card which is really easy to get but has a fuzzy path to graduation.

FWIW, I had both of the above cards, I opened the CapOne first, hated it because of the low limit, and closed it after 6-weeks. I then opened up the TDCash card, a 1% rewards card while secured, with a $5,000 limit and used it for exactly 6-months before it graduated to an unsecured card with a $5,000 limit.

I took Cap 1 out in my Bk.
TD Bank isn't in my part of the USA, It looks like a great option for those in the East.

[justbroke]

I have a bit of a sour taste on CU's. The CU i had my truck loan and a credit card through made Tony Soprano and his crew look like girl scouts in my BK13.

Credit Unions (CUs) are member owned and are not happy with losses. It's likely because credit unions are usually regional or even geographically locked ot a small membership area. They don't have as many resources as the exceedingly large "national" CUs (like Navy Federal), or any regional/nationally chartered bank. CUs are also local, so it's much easier for them to deal with local collection issues.

So, I don't blame the CUs behavior as they are also protecting my membership. You'll find that most small (local) banks are also aggressive with collections because they must be. Anecdotally, there are some other creditors that are aggressive (Discover, American Express, and Best Buy).

I would not use Open Sky or anything without a national charter or a member of the NCUA (National Credit Union Association). I used to prefer large national banks (Citi, Bank of America, Chase) over regional and especially credit unions. I like credit unions more now as I like the loyalty to the membership. They are also much easier to write a reconsideration when there is a decline.

But I do understand the distaste that some have for a CU or small local bank. Yes, they are the ankle biters of bankruptcy -- I call them that because they always want a reaffirmation on collateralized debt. On the flip side, I understand the model and that they don't have the assets of the regional and nationally chartered banks so they can't absorb much. They must also send the message to the membership that losses won't be tolerated.

(The reason CUs are easier to obtain loans and overcome declines (via reconsideration) is because they are a discretionary lender. They will give you a credit card with a 620 score whereas the nationally chartered, and regionally chartered, banks will promptly send you a decline. Credit unions have their place in the world of banking and I appreciate their service. I don't like the cross-collaterlization, but I understand the reasoning. It allows them to provide more credit products by leveraging assets.)

[shipo]

I took Cap 1 out in my Bk.
TD Bank isn't in my part of the USA, It looks like a great option for those in the East.

The good news is CapOne is arguably the most forgiving financial institution out there when it comes to a bankruptcy; the consensus is, wait six to eight weeks after your discharge and then apply, odds on bet they'll approve you.