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Saturday, June 14, 2008

Pardon me if I don't take up a collection for them
Posted by Jill | 8:50 AM
How the hell do you end up with six figures in credit card debt when you're worth a hundred million fucking dollars and have eight houses?

Senators John McCain and Barack Obama released their Senate financial disclosure statements on Friday, revealing that Mr. McCain and his wife had at least $225,000 in credit card debt and that Mr. Obama and his wife had put more than $200,000 into college funds for their daughters.

The bulk of the McCains’ obligations stemmed from a pair of American Express credit cards that are held in Cindy McCain’s name. According to the disclosure reports, which present information on debts in a range rather than providing a precise figure, Mrs. McCain owed $100,000 to $250,000 on each card.

Another charge card, held by what was described as a “dependent child,” had also accumulated debts of $15,000 to $50,000. In addition, a credit card held jointly by the couple was carrying $10,000 to $15,000 in debt, the filing indicated, at a stiff 25.99 percent interest rate.

First of all, you've got to love the part about the Obamas, with a net worth of 1/10 of that of the McCains, managing to put away $200,000 for their daughters' college expenses. You know, fiscal responsibility and all that. Second of all, why the hell is a couple with a net worth of over $100 million paying an interest rate of over 25%? Make a few late payments there, perhaps? Think that deadlines and rules don't apply to you, perhaps? And what are you teaching your child when you allow her to rack up $15,000-50,000 in credit card debt?

With Americans piling up credit card debt by the thousands in an ultimately vain attempt to sustain their standsard of living, and credit card debt being the next debt crunch to hit us, it's hard to take John McCain seriously as a beacon of financial responsibility when his own financial house is such that he's paying over 25% interest on six figures of credit card debt.

(h/t: John Cole)

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Blogger Scorpio said...
McCains probably think of feeding the sharks as supporting their relatives.

Cards keep them from having to use cash. Sure, they could pay it off. It's conspicuous consumption to let it sit out there.

Anonymous Anonymous said...
I'm not sure if many of you know this ... but the Bureau of the Public Debt, United States Treasury, actually accepts voluntary gifts from the public to reduce the National Debt, regardless of amount.

And @ least one weblogger plans to contribute part of his commissions from said blog's online shopping towards those ends.

Now you know.

(Or what otherwise stands in the way of recognising this as fact?)

Anonymous Anonymous said...
I think it's dishonest to suggest that McCain is paying the 25% interest rate when there's no evidence that he does not pay off the credit card balance every month. The article said that the card carries a 25% interest rate, but did NOT say that the McCains were paying that interest on revolving debt.

Sounds to me like McCain is wisely taking advantage of credit card rewards, wouldn't you agree?

Anonymous Anonymous said...
I am one of those people who puts everything on the card, earns my points, and then pays it in full every month. I can't imagine spending 6 figures on my credit card in a month. And I can't fathom letting "minor child" have a credit card at all, let alone not taking it away if they spent 5 figures of my money using it.

That being said, it's wonderful that they have put away money towards their children's educations. However, if they are not earning (through appreciation, dividends, and tax breaks combined) more on that money than the interest they are paying on debts, that's not fiscal responsibility.

Anonymous Anonymous said...

McCains have the credit card debt.

Obamas have the college savings.

Anonymous Anonymous said...
I pay my taxes with my amex, and pay estimated tax quarterly. which means that 4 times a year, you could find me carrying 6 figures in debt for a month. Pay it off each time and have no interest, but I do love the miles. Don't see why the McCains would be any different. Used to pay for college with my CC too. Again, paid it off each month, but it did wonders for the old credit rating. Rent too.
Shortwoman. "dependant child" is different from "minor child" and anyone who has done any estate planning knows that you get the money to your kids early and often, so they very likely carry a similar tax burden.

Blogger Steve said...
So the McCain's are playing the plastic. Most rich people are blessed with a natural, or learned, talent when it comes to making or saving a buck.
Now I wonder how much of a difference getting or NOT getting that permanent Bush tax cut will make in the McCain family fortunes? Think they don't have that one worked out already?

Blogger Porlock Junior said...
A couple of commenters note that the balance may be momentary and not accruing interest at all. True enough, and I am in that position myself much of the time.

Odd, though, that they would have a card that charges such high interest. With their money, their credit ought to be good enough to get cards with a less usurious rate, even with the same benefits. After all, it's always possible to slip up and have to pay interest on a balance for a month, and who wants to pay such interest?

But, off the topic and in the public interest, here's a tidbit you may not know: Your FICO rating does not know whether you pay your balance every month! If you run up a big balance and pay it off instantly, FICO computes, "Hmm, they're carrying a big balance here, must be a big risk, let's drop the rating."

Happens to me pretty much every time I charge big airline tickets. You can check my facts in the same place I got them: in the analysis that comes with one's FICO score. (Washington Mutual offers access to this with its cards, and probably some other cards do also.)

BTW, don't you just love those Obama family values? They are so damn exemplary, we're gonna need a whole lot of smears against Mrs Obama to keep people from admiring them.