Credit cards and insolvencies go hand in hand.

According to analysis by The Salt Lake Tribune, the typical Utahn who filed for bankruptcy during the year ended June 30, 2004, reported more than $17,069 in credit card debt, significantly more than the $8,000 in revolving charges the average American family carries month to month. Credit card debt was as high as $241,887 for one couple.

What remains unclear is whether charge card debt is a primary cause of bankruptcy or the inevitable result of consumers pushed to the edge by illness, job loss, divorce or any other of life's trials.

Opinions vary.

"Credit card debt often hides what the money was spent on," says Andrew Gustafson, a Utah County attorney specializing in bankruptcy. "So you can't always say whether money was spent on flute lessons for the kids or to pay medical bills."

The credit card industry contends credit card use rises substantially in the months before a bankruptcy filing - an argument that suggests consumers are merely profligate spenders willing to go into debt to acquire fineries, then smugly walk away.

Yet few people run up huge credit-card balances because they intend to file for bankruptcy, says Ralph Mabey, a former U.S. Bankruptcy Court judge now in private practice in Salt Lake City. "From my experience, those who run into financial problems are much more likely to use their charge cards to try to tide themselves over until their fortunes turn around."

Diane and Scott Riggs of Riverton were tempted to use their credit cards to weather trying financial times after he lost his job in December 2003 and subsequently faced back surgery for a slipped disk. He was out of work for more than a year.

"We used to use our credit cards a lot, and it wasn't a problem. We always were able to pay our bills every month," Diane Riggs says. "After Scott lost his job we could have kept using our cards, but we didn't want to, knowing we weren't in a position to pay for what we were getting."

Instead, the Riggses cut back on their spending to the point where they could live on her salary as an educator. "We made our house payment, we ate food and made sure our utilities were paid. Beyond that, we told everyone else that we were sorry, we just couldn't pay them."

While the American Bankers Association (ABA), which represents the nation's major credit card issuers, concedes the level of credit card abuse is low among consumers who are headed toward bankruptcy, it nevertheless believes those debtors who are capable of repaying at least part of their charge card debt should be required to do so.

At least 25 percent of debtors who have filed for bankruptcy could have repaid at least a third of their debts within 60 months of filing, ABA spokeswoman Catherine Pulley says. "You have people filing for bankruptcy with extremely high incomes. . . . We don't think that is fair."

Many observers, though, lay some of the blame for the rising bankruptcy numbers in Utah and other states on the credit card companies themselves.

Stories abound of college students graduating with thousands of dollars of credit card debt, of high school students who work part time earning $6 an hour regularly receiving solicitations offering cards with limits of $10,000 or more.

Gaby Graff, a St. George seventh-grader, believes those stories.

"I've gotten credit card offers in the mail. One said they'd give me $5,000 [in credit]," the 13-year-old says. "I thought it was really stupid, since the only money I have is what I get from my parents."

In offering credit, the charge-card issuers are playing a numbers game.

"Credit companies have actuaries whose job it is to sit in an office and calculate the optimum number of bankruptcies their company should have in order to maximize their [overall] profits," Gustafson says. "And if they don't have enough [bankruptcies] they will relax their lending standards.

"There is no element of responsibility in lending on the part of those companies," he adds. "Their only goal is to be profitable."

Bankruptcy researcher Teresa Sullivan of the University of Texas at Austin says requiring companies to more clearly disclose interest rates could help consumers make more informed decisions about their credit card use.

She says students frequently mention they would like to see information on their monthly statements that would tell them how long it will take to pay off their debt if only the minimum monthly payments are made. "A lot of those students have had calculus but they would still like that kind of information to be presented clearly."

Like most short-term loans, credit cards tend to carry high interest rates, Sullivan says. "Unfortunately, a lot of people either don't understand or lose sight of what those interest rates will actually end up costing them."

The increasing number of bankruptcies can be viewed as one consequence of an economy that relies heavily on consumer spending, says Sam Gerdano, executive director of the American Bankruptcy Institute.

Consumer spending makes up two-thirds of the domestic economy and much of that activity takes place with the use of credit cards, he says. "They are an essential part of our economy. Our economy would crater if everyone suddenly stopped using them."

Credit cards, nevertheless, if not used judiciously can provide an easy way for consumers to live well beyond their income stream - which could go unnoticed for years until some unexpected economic event, such as the loss of a job or second income, puts pressure on a household's income.

"Most Americans don't have savings to fall back on," he says.

Diane Riggs says now that here husband is back to work she is fighting the temptation to get a credit card and begin using it. "I'm glad we don't have them but I miss them terribly."

steve@sltrib.com