The Challenge of Credit Card Debt for the African American Middle Class

In the wake of the worst effects of the Great Recession, African Americans, like Americans as a whole, are getting their balance sheets in order and paying down credit card debt.  Credit cards have become a “plastic safety net” to replace dwindling incomes, private assets, and social investments, and to help families stretch their resources when paychecks and savings were not enough. But research from Demos’ “National Survey on Credit Card Debt of Low- and Middle-Income Households”, found that African Americans face challenges to their financial security that are unlike those of white households.

In the newly released study, “The Challenge of Credit Card Debt for the African American Middle Class”, co-authored by Demos and the NAACP, new data shows under difficult economic conditions many African American families rely on credit cards to make ends meet or invest in their future. But, African Americans are also more likely to pay high interest rates and suffer more negative consequences of debt than other groups. This report tells their stories, examines the reasons why African Americans turn to credit cards and the repercussions for their household finances.

Read the entire report, “The Challenge of Credit Card Debt for the African American Middle Class”, here.

What You Can Do

The establishment of the Consumer Financial Protection Bureau and the implementation of the 2009 CARD Act are positive steps toward providing greater protection for America’s weakened middle class. In addition, state-level policies like those regulating the use of credit checks for hiring decisions have the capacity to limit unnecessary and harmful barriers to employment. Protections that establish fair, non-predatory credit practices relieve an already overburdened and increasingly insecure middle class from the high cost of debt. 

If interested in advocating for your state legislature to advance policy critical to fairness and security around consumer credit, there are three areas where new policies are required: medical debt, financial regulation, and credit scores. The report also identifies industry practices that were not addressed by the CARD Act, but which remain critical to the fairness and security of consume credit.

To learn more and/or host trainings on understanding credit and credit rehabilitation, click here for PowerPoint presentations, toolkits and resources guides.

If you believe you were disqualified for a job or terminated from a job due to your credit history, we want to hear from you! Email us at econprograms@naacpnet.org