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A credit card may or may not be another burden during bankruptcy. But unless the credit cards have removed the borrowing limitation on individual credit, there is no way a credit card can augment overall household indebtedness .The main reason for the introduction of credit cards was to distribute the pattern of credit .Credit cards have worsened the condition of consumer financial conditions, thought they are vastly used as a borrowing medium, this however represents a substitution of credit card debt for other high interest rate debts.
There is some kind of a relation between bankruptcy and credit cards. In a noted trend that credit cards use increases preceding a bankruptcy. Credit cards are often used as a credit line, and it is the last resort so as to avoid defaulting in the bills. Credit card debt is unsecured debt that can be discharged in bankruptcy. In fact, empirical evidence shows that although credit card defaults have risen in tandem with bankruptcy filings, defaults on secured home and auto loans have remained steady during this period. It is also said that credit cards have increased bankruptcies through a reckless expansion of credit card credit to high risk borrowers, especially low income borrowers.
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