A: Going through a bankruptcy is stressful enough as it is. So don’t add to that stress by worrying about things you don’t have to – like getting approved for a credit card – because guess what? Getting one is easier than you think! Here’s what you need to know…

When it comes to credit cards for bad credit or bankruptcy, you will want to focus on banks that are specifically geared to people in those situations. That being said, some “regular” banks do offer secured cards for bad credit, but the majority of them don’t.

With secured credit cards, you put up a security deposit and that amount becomes your credit limit. For this reason, practically anyone can get approved for one. In fact, there are a number of credit card companies that offer guaranteed approval as long as you meet the basic requirements (like being a legal resident, 18+ years old, etc). These are the best credit cards for people with bankruptcy because your credit history will be irrelevant to the approval process.

On the other hand, unsecured credit cards will base their approval on your credit score and credit history. As you can guess, it’s next to impossible to get one with a recent bankruptcy on your record, especially in today’s economic environment.

Most bankruptcy friendly credit card issuers you probably have never heard of before – that’s to be expected so don’t let it alarm you. After all, if it’ a bank that solely focuses on a credit card for people with bankruptcy, you would normally have no reason to do business with them.

That being said, watch out for the illegitimate companies out there. Some may not report your account to the three credit bureaus. Some may rip you off with excessive fees. So make sure you get your card from a legit company that is respected in the credit card world.

I hear about so many people that get new credit cards to rebuild credit after a bankruptcy, only to overuse them. By that I mean using too high a percentage of the card’s credit limit.

A component of the FICO score formula takes into account what percentage of your credit limits you use. You may think using a higher percentage is better but that’s not the case. Why? Because the closer you get to maxing out your credit limit, the riskier you look… and your credit score suffers for it.

For this reason most personal finance experts typically recommend never using more than twenty to thirty percent of your available credit. So once you get your new credit card make sure you keep this in mind.

The inevitable drawback of credit cards for people with bankruptcy is that they charge fees. Some charge monthly fees, annual fees, maybe even a processing fee. It’s hard to avoid these – you should expect up to $10 to $15 a month on average. This is why you will want to move onto a better credit card as soon as you are able.

So after you have had your card for 9 to 12 months – managed it well and re-established your credit – you should start looking for something better, hopefully something with no annual fee.

Check out Credit Card Forum’s sponsored listing of credit cards for people with bankruptcy:

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