Best Credit Cards After Foreclosure
There are few things as damaging to your credit as having your home foreclosed. For the vast majority of Americans, their home is their largest investment, and defaulting on their loan will seriously damage their credit for a long time. And if you have gone through foreclosure, then you may be one of millions of Americans who became the victim of the real estate bubble and the Great Recession.
Having survived foreclosure, you will still need access to credit cards. Compared to other forms of payment, credit cards offer unparalleled security and convenience. In addition, it is far easier to reserve a hotel room or to rent a car when you have a major credit card compared to using cash, debit, or checks. Also, many major credit cards offer car rental insurance at no extra charge, so you don’t have to purchase the expensive coverage sold by the car rental agencies.
Those who have gone through foreclosure will have damaged credit, similar to others who have gone through bankruptcy, divorce, or have had problems paying medical bills. The key to receiving a credit card when you have damaged credit is to apply for a secured credit card, which works much like a standard credit card, except it requires the payment of a refundable security deposit before the account can be opened. But once opened, a secured card account still requires making a minimum monthly payment and interest can be incurred when you carry a balance. And fortunately, having a secured card open and in good standing will improve your credit score over time. What’s important is that you make all of your payments on time, and pay at least the minimum every month. Fortunately, all of these cards offer payment alerts via text or email.
Here are six credit cards that are ideal for those who have been through foreclosure:
The Capital One Secured MasterCard is one of the few secured cards that does not have an annual fee. New applicants submit a refundable security deposit of $49, $99 or $200 based on their creditworthiness, which results in an initial credit line of $200 to $3,000.
But far from being a stripped down credit card, Capital One’s Secured MasterCard offers numerous valuable benefits, including extended warranty coverage, auto rental insurance, and price protection. In addition, it offers the Capital One Credit Tracker which includes free unlimited access to your credit score, what-if simulator, and other tools. There is no annual fee for this card, and like all Capital One cards, there are no foreign transaction fees imposed on charges processed outside of the United States.
The USAA Secured Card American Express requires a $250 initial minimum deposit, but it is placed in a USAA Bank two-year Certificate of Deposit (CD) (Opens pop-up layer), an interest-earning deposit account which guarantees returns at a current rate of 0.54% APY. This card has a standard APR of 10.15% to 20.15%, which applies to purchases, cash advances, and balance transfers. In addition, it has no penalty APR if you happen to make a late payment. To apply, you must be a member of USAA which is open to current and former members of the military, as well as the family of members. There is a $35 annual fee for this card, and no foreign transaction fees.
primor Secured Visa Classic Card
This card offers a fast, application process and on application fees. As with other secured cards, applicants must submit a refundable security deposit in order to open an account. This card does offer a low 13.99% APR interest rate for purchases and a 18.99% APR for cash advances. There is a $39 annual fee for this card.
The primor Secured Visa Gold card is much the same as the Classic version, with two exceptions. First, it has an even lower interest rate of 9.99% APR. But on the other hand, it has a higher annual fee of $49. Otherwise, it offers guaranteed approval to applicants whose monthly income exceeds their monthly expenses by $100 or more, and reports your payments to the three major consumer credit bureaus, making it an excellent choice for those who are trying to rebuild their credit.
The OpenSky Secured Visa Credit Card requires no credit check and has a short application process. In addition, it allows customers to submit their refundable security deposit in a number of different ways, including checks, money orders, debit cards, wire transfers, or even Western Union. The deposit can be any amount between $200 and $3,000, which becomes your credit limit. The standard interest rate for both new purchases and cash advances is 17.64% and the penalty APR is 21.75%. There is a $35 annual fee for this card.
The Unity Visa Secured card is offered by OneUnited bank for a low $39 annual fee, and it features a competitive interest rate of 17.99% APR. In addition, it offers a fixed introductory rate of 9.95% APR for six months.