Bankruptcy

Employer Credit Cards, Worth the Hassle? Not If You Carry A Balance

By Wendell Sherk, Missouri Attorney

If you work at a large retailer, the store probably offers a “store brand” credit card.  If you’re getting stretched financially, you probably shouldn’t take advantage of this “benefit.”  If you are getting deeper in debt, definitely don’t.

Bankruptcy lawyers frequently see clients who have charged a large balance on the store’s branded card and are now worried they could lose their job if they “file bankruptcy on the boss.”   That’s a big problem.

You have to list all your creditors -  All of them – when you file bankruptcy.

If you pay them off within 90-days before filing, it could be a preferential payment the trustee could sue to recover for the benefit of all creditors.

It is true that your employer is not allowed to fire you because you filed bankruptcy.  But that protection does not apply if there are other reasons for the termination.

Even if you are not thinking about filing bankruptcy,why would you want to owe money to the boss?  The amount of pressure they can bring to bear on employees to pay a bill or get the bill current is almost impossible to resist.  Which means that as long as you owe on your employer’s credit card, you have put your house or rent payments, your car payments, your utility bills in second place behind paying that bill first.

You give up the ability to decide who gets paid first.  And you put yourself in a tough position if you ever need bankruptcy help and you have few other alternatives.

Even if you only use the store card so you can get employee discounts, you should only use the card for convenience — and pay it off each month.   This is true of all credit cards of course, but it is particularly true with a card from your employer.  That way, at worst, it only slightly delays your debt relief options.

So, just say “no” to your store’s credit card.

Full post as published by Bankruptcy Law Network on May 28, 2010 (boomark / email).