The aftermath of a Chapter 7 bankruptcy can be very stressful. While most people are glad to be done with the court cases, the reality is that your credit is probably in very poor shape and your assets may be few. Most individuals are looking to rebuild their credit at this point and start over, but considering how a Chapter 7 bankruptcy will stay on your record for 10 years this can seem like a daunting task. Surprisingly, credit cards can help you through this transition Airy phase. According to US News & World Report, holding a secured credit card can help you quickly rebuild credit in the aftermath of Chapter 7 bankruptcy.

A secured credit card works differently than a traditional credit card. With traditional, unsecured credit cards, you do not put any collateral down to receive a credit limit. Instead, this limit is typically calculated off of your income to debt ratio. With a secured credit card, you need to place down collateral in order to receive a credit limit. Basically, if you put down $800 on a secured credit card as collateral, you will then get $800 of credit that you can use.

The idea with a secured credit card is to use it as little as possible and pay it off religiously. You will not want to use your credit card very much as this will negatively affect your income to debt ratio; however, if you can make a $20 purchase a month and pay it off this will be reported to the credit bureaus. Secured credit cards can provide a low interest and reliable way to start rebuilding your credit.