One of the benefits of being a Fool writer is that I get really interesting email from my readers. I'll bet I'm not the only one among my colleagues to get gobs of cranky missives taking issue with a position we've taken on, say, Wal-Mart's
Another kind of email I receive frequently is a thoughtful response to something I've written that offers additional valuable information or a useful new perspective. Here's an example. I recently wrote about how some members of Congress are mired in credit card debt. I then heard from Lou Watts, who had this to say:
"Although I found your article on credit card debt interesting, I thought that you might have pointed out -- notwithstanding Liz Pullman Weston's statistics suggesting that 'Most households that carry balances owe $2,000 or less' -- that if you're a full-time associate at Wal-Mart (or anywhere else for that matter) making less than $25,000 per year and can't afford to pay more than the minimum monthly payment, you're just as 'mired' in debt at $2,000 (probably more so) as the U.S. congressman with a six-figure income, who owns two or more residential properties as well as other assets and owes $75,000 or more."
That's very true. It's often those at the lower end of the income scale who have the fewest options. Lou continued:
"It would be very interesting to see a statistical comparison of credit card debt levels based on demographics such as pay scale, age bracket, and job title (college student, engineer, etc.), as well as the average credit card limits versus average credit card balances. I'm sure that this information must be available somewhere on the Internet."
I agree that it probably is. In fact, a little digging got me this information: According to a Wall Street Journal Classroom Edition article, "Debt as a percentage of disposable income is highest for the wealthiest Americans." The story included data from Goldman Sachs
Lou also opined that "'Ease of use' is not in any sense 'good news' when it relates to credit cards, especially for low-income people. Taking out a 'loan' to buy a Big Mac is absurd. The easier it is to use a credit card without thinking about the consequences, the more likely that it will be abused, and the more quickly debt will increase. . If it were up to me, it would be illegal to charge less than $20 dollars in any single transaction, and the minimum monthly payment would be $50 or 35% of the average amount charged on the credit card during the three most recent billing cycles, whichever is higher. Just maybe, that might help suppress the credit card holder's next impulsive urge to simply 'charge it!'"
An interesting proposal! I have to agree with him on the loans for Big Macs. You might not realize it, but if you pay for items like sandwiches and sneakers with credit cards and then you don't pay off the bill in full, you've effectively taken out a loan for those items. Did you really want to do that? Did you want to take several years to pay off a tab at Wendy's
Learn much more about the surprisingly interesting credit card industry by visiting our Credit Center, which also features tips on getting out of debt, along with guidance on how to manage your credit effectively. (We even offer spiffy Motley Fool credit cards.) Really. I mean it. There's some great stuff in our Credit Center, and it's all free reading.
The following articles can also help you:
- The 8 Commandments of Credit
- Urban Credit Legends Exposed!
- $24 Billion to Card Companies . for What?
- Sneaky Credit Card Tactics
And you can read about all things credit-related on our Consumer Credit / Credit Cards discussion board.
Longtime Fool contributor Selena Maranjian owns shares of Wal-Mart. The Motley Fool has a disclosure policy.