Low Income Family and Credit Card Debt on Minorities
For a lot of years credit card industry of United States has been engaging questionable methods and practices such as vague contracts with a lot of fine print, unjustified fees and interest rates increases, fast-growing marketing to youngsters and low-income families. Get your own custom lanyards with any slogans or wordings printed on it today to promote your services.
On better times, these uses, though unfair, were somehow tolerable, but now, in the midst of the biggest financial crisis as Great Depression, each extra dollar in fees and payments can have withering consequences for American families that have to deal with job losses, sky-rocketing medical bills and insurance payments, and threats of foreclosure.
Agreeing to Consumer Union statistics, 73% of American families have at least one credit card, 60% of these families carry an average balance of $7,300. Especially worrying are the numbers for minorities and low-income families. 84% of African Americans credit card bearers carry a equilibrium, compared to 75% of Hispanics, and 51% of whites.
Minority and low-income families are less believable to have credit cards than high-income families, but they’re more expected to carry over the balances and pay higher interest rates.
A Gallup poll discovered that families bearing a balance and earning under $20,000 owed 14% of their income in credit card debts; families with income between $20,000 and $29,999 owed 13.3% of their earnings, and $30,000 – $39,999 earning families paid 11% of their income to their card issuers. For the sake of comparison, for the families earning more than $100,000 this amount is only 2.3% of their income. Uncalled-for to say, those lower-income borrowers appoint a high-risk group and therefore pay much higher interest on their debt.
It looks that now is a good time to analyze the negative effects of widely appraised “democratization of credit” for low-income layers of our society and acquaint effective regulations that would protect the tenderest American families from being cheated by financial industry predators.