Overview

Americans are using credit cards more than ever before, credit card debt for households has almost tripled since 1989, and about 13% now report their credit card debt as too burdensome. Specifically, approximately 34% of Latinos in the U.S. continue to live paycheck to paycheck with little savings to protect them against unexpected circumstances, such as job loss, illness, or divorce. When these circumstances arise, many low-income Latino consumers rely on credit cards to make ends meet. On one hand, wise credit card use is a good method for building a credit history, which is essential for accumulating assets and wealth. However, an increased reliance on credit cards can expose Latinos to harmful credit card industry policies and practices and result in a dangerous accumulation of unsecured debt.

Credit card use and credit card debt is also on the rise among Latinos. For example, in 2001, nearly 53% of Hispanics held a credit card, compared to 43% in 1992. Even so, Latino consumers have limited access to mainstream credit cards with desirable terms, such as a low annual percentage rate. Furthermore, because more Latino consumers are carrying balances and accumulating debt, they are more susceptible to harmful credit card practices, such as default penalty rates and high-cost fees associated with late payments and purchases made outside the U.S. Consequently, the ability of Hispanic families to build the assets and wealth necessary for long-term economic stability is also hampered. Actions by Congress and the credit card industry can improve financial opportunities for all Americans.

NCLR Position

Good credit card-related policies would empower consumers, ban indefensible industry policies and practices, and promote access to safe and affordable credit cards for Latinos.

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