Everybody seems to be getting some kind of relief in order to help them through the coronavirus outbreak.
The unemployed. Small businesses. Big businesses. Renters. Motorists with car insurance. Middle class taxpayers.
All this assistance is completely necessary and welcome, as families struggle to cope with the financial challenges of losing their jobs, being furloughed or having their pay cut, unforeseen medical expenses, or simply the extra added costs of staying home and caring for their children and other family members.
But one burden that’s gone unaddressed by elected officials and private companies is the one that may cast the longest financial shadow over ordinary people: Credit card debt.
Nationwide, Americans carried a total of $825 billion in credit card debt as of April 2018.That represents an average household credit card debt of $9,333. New York ranks eighth in the country at $8,764 average credit card debt.
Credit card interest rates are obscenely high, averaging over 16.1%. Many people, especially low-income people and people with low credit scores, pay upwards of 27% in interest.
Those high interest charges keep people in the credit loop, making it almost impossible for some to ever pay down their debt and get out from under it. It’s particularly excruciating for families today, burdened by the other financial challenges created by the outbreak.
To make matters worse, many families are being forced to use their credit cards even more frequently to make ends meet.
When it comes to voluntarily providing relief, the credit card companies are only paying it lip service. A survey of 17 companies by Credit Karma released last week showed that only a handful of companies are offering assistance.
Many are offering only vague guidelines as to who might be eligible and few are detailing what that relief they might actually offer.
Rather than paying lone-shark interest rates to multi-billion-dollar corporations, struggling citizens could instead be paying their mortgages and rents and water bills and utility bills and buying food for their families.
Some lawmakers, including state Assemblyman Angelo Santabarbara, are calling on the governor to ask the federal government to intercede on the citizens’ behalf, to make this issue a priority in his talks with the White House, and for the credit card companies to step up and be good community partners.
The federal government should use its regulatory authority to demand that credit card companies voluntarily defer payments and even demand they reduce or forgive interest rates while the crisis is ongoing. If companies won’t do it on their own, the feds must look at other actions it can take to force them.
If the government is serious about providing financial relief to its citizens, it cannot continue to ignore the financial weight that credit card debt is having on them.