Posted by Mike Smith :: July 2, 2008 @ 9:10 amPresidential candidates often try to show voters how much they are like regular Americans. By sharing common ground with voters, they hope to gain camaraderie, trust, and ultimately a vote. In at least one area, presidential candidate John McCain is very much like the average American: his household is carrying substantial credit card debt.
The New York Times reported the figures from the required Senate financial disclosure statements filed by McCain in mid-June. The exact amount of credit card debt was not disclosed, but the range was reported as between $235,000 and $565,000. A portion of that debt was on a card with a whopping 25.99% interest rate. Perhaps more surprising than the debt and interest rate is that the McCains had previously reported total household assets of $24.6 million to $39.5 million.
While the article was likely written with political motivations, the figures also remind us all that credit card debt is not limited to the poor. Even in cases where families do not have to run a credit card balance, they sometimes do. We could easily attribute such behavior to either ignorance or indifference. Why else would someone subject their finances to the constant drain of the high interest charged on credit card balances? Another likely explanation is that habits learned earlier in life could still be part of their thought pattern. Even for those living within their means, paying interest on credit cards may seem so normal that they forget to eliminate it once they are able to.
What we can take away from this lesson is that bad financial habits will not magically disappear if you were to suddenly have more money. Perhaps this is why so many lottery winners eventually find themselves back in the same financial situations they had before their windfall. Making positive financial changes will not only help to improve your situation now, but also allows you to remain well off when you finally do reach a better place.
1 Comment
I think one way to help the people with a credit card debt would be able to deduct your interest paid on cards off of income tax returns. I used to be able to, but somewhere the banks and the big boys decided to change all that.
This would be like a tax break for all of us. Also since the credit card companies charge such a ridiculous rate, if you have had bad credit why not use some of that high interest money to pay an insurance policy to cover the debit in case of your debit? The .79 cents per hundred is crazy when the bank is in the insurance business too. They've got the best of both worlds.
I've been through the mill since 2000. I had a predatory lender, Countrywide. Sure, you've all heard of them. Well, in 2000 we were unaware of what was going on. I lost my home, a small business and all of my 401 to these great people and am really a little bitter and p---ed off. That’s all I have to say for now. If you would like to respond I'll listen.
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