Document Type

Working Paper

Publication Date



Banking and Finance Law | Bankruptcy Law | Law | Law and Economics


The Charles Evans Gerber Transactional Studies Center


Center for Contract and Economic Organization


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