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Bankruptcy: Credit cards — enemies or friends?

| Feb 1, 2017 | Chapter 13 |

In Louisiana and other states, some people are said to never leave their homes without their credit cards. According to the Federal Reserve, credit cards are used to make more than half of all purchases nationwide. However, if managed properly, a credit card can be a consumer’s friend; if not, it can be an enemy that may bankruptcy protection to alleviate.

One of the primary benefits of a credit card is the fact that it can establish the user’s credit history — or improve an existing low credit score. Using a credit card wisely can enhance a credit score and increase chances of obtaining a mortgage or other loan. Shopping online is also very easy with credit cards, and it can bring about substantial savings in time and traveling costs when purchases are delivered at the consumer’s address. When stranded anywhere late at night, a credit card might be a savior.

A significant attraction of credit cards is the benefits and rewards that consumers can earn. However, those only offer advantages for consumers who use their credit cards according to the terms of the creditors. To benefit and maintain a credit card in a way that will prevent overwhelming debt, it is best to pay the entire bill every month and avoid carrying any amounts over to the next month. Timely payments can prevent additional interest charges, and keeping track of every bit spent on a credit card can alert the consumer to the need to hold back the spending for a while. Unauthorized transactions by scammers will also be visible.

Unfortunately, unanticipated events such as loss of employment or medical emergencies can ruin the good intentions and budget of any credit card holder. In such cases, the guidance of an experienced bankruptcy attorney in Louisiana can provide an opportunity to regain financial stability. A consultation with a lawyer can provide answers to the questions the client might have about the different bankruptcy chapters and the pros and cons of each to allow informed decisions.

Source:, “The Federal Reserve Reveals 53% of All Purchases in US Are Made With Credit“, Rebecca Davis, Jan. 26, 2017

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