Minority Credit Card Debt

Guest: Board Monitor
Post subject: Minority Credit Card Debt
Posted: Mon Jun 27, 2005 10:44 am

A new study finds that African Americans and Latinos are more likely to be in card debt than whites:

http://www.cardratings.com/creditcardnews/2005/06/credit-card-debt-in-african-american.html
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Guest: guessindigo
Post subject: Minority Credit Card Debt
Posted: Mon Jun 27, 2005 1:45 pm

Hi Curtis,

Unfortunately, minorities are the least "financially" educated. Because of this, they make costly mistakes. Financial management is not taught in schools (but it should be) and often falls on the parents, who they themselves may not be financially literate.

This applies to everyone, but statistics don't lie, minorities make up the majority.

Guest: Polonius
Credit Expert (100+ Posts)
Post subject: Minority Credit Card Debt
Posted: Mon Jun 27, 2005 4:48 pm

guessindigo, the article is not about minorities making "costly mistakes" from ignorance. It's about the problems caused by poverty, insecure jobs, lack of health insurance, the failure of minimum wage legislation, and downright predatory marketing practices targeted to minorities by vicious subprime lenders.

Unfortunately, many of the best suggestions of the article to cure the problem--raise the minimum wage, expand health insurance, bolster unemployment insurance--were REJECTED by the voters in the last national election and continue to be rejected by the Republican Congress whenever the issues are raised. (Congress voted down the most recent bill to raise the minimum wage.)

And so the poor get poorer and the rich get richer...

Guest: JaneiR36
Post subject: Minority Credit Card Debt
Posted: Tue Jun 28, 2005 5:30 am

Unfortunately, at least a small part of this problem stems from financial ignorance.

One of the practices I think of when I think of predatory lending would be title loans. Those get money quick get rich quick scams... oops I mean loans. For people who don't want to take the time or effort to apply for a cheaper loan or can't even be approved for one, and their family members are in as bad a situatioin as they are, that can seem like the only option.

I remember when I first came to this site, looking to pay back my CC debt for cheap. I got some strange advice from my family members after I asked them to finance my payment. One said you used the money, pay for it (implying I should go ahead and pay at the MBNA 19.74% rate ), the other one said get a second job so my work isn't so monotonous and I could pay quicker. Both were really quite noble suggestions, but involved doing raw work and breaking my back that I did not need to. A couple applications, a dozen phone calls (and a little bit of begging) later, my loans are being financed for much cheaper.

The article does touch on something I now know to be very important: we need to know how credit works BEFORE we get into financials difficulty. According to the article, while some families turned to home equity loans (= CHEAPER), others had to turn to predatory lenders in bad times.

I just feel really bad about this. It's not like it's a situation that can be easily remedied.

Even minimum wage increase will not necessarily solve it. I'm in debt for thousands of dollars; will an extra 50 cents an hour rescue me?

People just need to figure out the American way. It's not about working hard, it's about working smart, take all you can get, keep all you take and damn everybody else. Or something like that, only not so snotty, stupid and arrogant.

Guest: legitimate user
Post subject: Minority Credit Card Debt
Posted: Thu Jun 30, 2005 2:56 pm

Interesting, I don't think it's a secret that I do credit card collections (for a prime lender). When I started, I expected the same results that this article states. However, I found that the people I call every day are overwhelmingly white (judging by names and voices) and elderly. I work early delinquency, so pretty much all the accounts have to come through my queue at least once.