The relationship between bankruptcies and credit cards is a solid one. It is the reason most often cited in bankruptcy filings, greater by far than job loss, medical bills, divorce, taxes or legal bills. Retail credit is an Achilles' heel of an economy often described by the president on down as a joy to behold, a time of rising prosperity and plentiful jobs. And it is knowingly promoted by lenders who should know better. Still, aggressive lenders aren't the only factor.
Aggressive lawyers play a role.
Changing values do, too. The stigma of bankruptcy has faded as consumers learn more about the marketplace. Population growth also makes a contribution. But it is the lenders who can exert the most control, simply by applying the old rules of prudent banking, which include declining to grant credit to those who shouldn't have it rather than soliciting their business. Credit card solicitations last year exceeded 3 billion, according to BAI Global, a Tarrytown, N.Y., market-research firm, a total that represents a better than 600 million increase over 1996.