Credit Card Saturation, Mortgages, and Bankruptcy Statistics

03 Mar Credit Card Saturation, Mortgages, and Bankruptcy Statistics

A funny thing happened on my way to taking out the trash. There were fewer credit card applications! Yes, folks, the credit card market may have reached saturation. This was suggested by Professor Charles J. Tabb, University of Illinois College of Law, in the recent December/January issue of the American Bankruptcy Institute Journal (sorry about no link; only subscribers have online access), who surveyed revolving consumer debt (mostly credit cards) and observed a slight drop since 2002 following a quadrupling from 1983 to 1999.

Professor Tabb also noted an “extremely close relationship” between revolving consumer credit and nonbusiness bankruptcy filings. He predicted that bankruptcy filings would soon return to pre-reform levels despite the harsh burdens of the new laws.

His article concluded that bankruptcy filings might level off once pre-reform levels were reached, since revolving debt has stabilized. But it questioned if the doubling of mortgage debt from 2000 to 2005 might suggest further increases, or if the recent decrease of credit card chargeoffs might suggest further decreases. We’ll find out soon enough.

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L. Jed Berliner practices exclusively in consumer bankruptcy, foreclosure defense, and related consumer protection litigation such as credit card defenses and suing debt collectors. He established his Springfield, MA practice in 1988. Attorney Berliner is a regular and active contributor to the Bankruptcy Law Network, the Bankruptcy Roundtable, and the National Association of Consumer Bankruptcy Attorneys, three specialized consumer bankruptcy forums on the Internet, and is an informal mentor to regional practitioners. He is recognized by his peers as an expert in consumer bankruptcy issues. He thoroughly enjoys being rated "excellent" in his client surveys.

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