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Credit Cards, Consumer Credit, and Bankruptcy

39 Pages Posted: 29 Mar 2005  

Ronald J. Mann

Columbia University - Law School

Date Written: March 2006


This paper analyzes the effects of credit card use on broader economic indicators, specifically consumer credit, and consumer bankruptcy filings. Using aggregate nation-level data from Australia, Canada, Japan, the United Kingdom, and the United States, I find that credit card spending, lagged by 1-2 years, has a strong positive effect on consumer credit. Finally, I find a strong relation between credit card debt, lagged by 1-2 years, and bankruptcy, and a weaker relation between consumer credit, lagged by 1-2 years, and bankruptcy. The relations are robust across a variety of different lags and models that account for problems of multicollinearity and auto-correlation in the time series and include variables to control for the effects of economic cycles on bankruptcy and dummy variables to isolate nation-specific effects

Keywords: credit cards, consumer credit, bankrutpcy

JEL Classification: D12, E21, G21, K20

Suggested Citation

Mann, Ronald J., Credit Cards, Consumer Credit, and Bankruptcy (March 2006). U of Texas Law and Economics Research Paper No. 44. Available at SSRN: or

Ronald J. Mann (Contact Author)

Columbia University - Law School ( email )

435 West 116th Street
New York, NY 10025
United States

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