Candy #3 - Credit supply to bankrupt consumers: evidence from credit card mailings
Song Han, Benjamin J. Keys, and Geng Li explored the supply of unsecured credit to consumers with bankruptcy flags on their credit records.
Also guess what they told us? Bankrupt consumers frequently receive credit card offers. Wow! (However, offers extended to bankrupt consumers carry substantially less favorable terms)
So, based on their data (checking out bankrupt homeowners who received the credit cards from the banks), the scholars said that they have direct evidence that some credit card lenders specifically target bankrupt consumers, thus building a market niche.
What do you think about this crazy scheme? I couldn't believe it either when I saw the data that they presented to us at the conference.
Greed! This is ridiculous and needs to be addressed in the political system somehow. I mean we are creating a system for people to fail, there's no morals, no scruples, just greed. It is sad to know that this happens and even sadder that people are not taking initiatives to stop this from happening.
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