Ready To Laugh At McCain Family Debt? Not So Fast ...

With news of the McCain family's six-figure credit card debt cropping up today, its not too hard to imagine a little light-hearted chuckling among middle class folks getting a look at the spendthrift habits of elites. As The Hill reported this morning, based on disclosure reports released today, Sen. John McCain and his wife Cindy owe at least $100,000 to American Express, with a "dependent child" also holding a card with a balance between $15,000 and $50,000.

But not all credit card debts are created equal. In fact, according to a prior disclosure form filed in May that was provided to The Huffington Post, a significant amount of the McCains' credit card debt is being held by American Express at an interest rate of zero percent -- making their debt a lot less like the costly credit card pitfalls facing many Americans and a lot more like the big sweetheart loans that can get national political figures in hot water. (Sen. Barack Obama's first choice to head up his vice presidential search committee resigned this week after a controversy emerged over a favorable mortgage he received from Countrywide, a key player in the current housing crisis.)

Zero-percent credit card interest rates are not exclusively for the rich or well-connected, of course. But the most common offers of that kind are often capped at a few-thousand dollars and shed their zero percent rate after six to nine months.

According to the May 15, 2008 disclosure form, though, during 2007 Cindy McCain originated an individual debt of between $250,000 and $500,000 with a zero-percent interest AmEx that was still not paid off by the time of the time of that filing.

[Click here to see page 18 from May disclosure form.]

In other McCain family financial news, Megan McCain -- she of McCainBlogette.com -- has announced she'll be producing a children's picture book about her father. While the publisher, Simon & Schuster, will be donating a portion of the money it makes off the title to the Intrepid Fallen Heroes Fund, a veterans' charity, it appears Megan will not. Perhaps she has a little credit card debt to pay off. But even if that's the case, there's no need to hurry -- the "dependent child" credit card debt listed on McCain's May disclosure form is also being charged at a rate of zero percent.

Comments

[Zhonni]

This is OUTRAGEOUS!!!!!!!!!!!

This is why the rich keeps getting richer and the poor more poor.

The poor pays at least 17% and often 24% because they missed or were late on a payment.

They pay Social Security on 100% of their earnings, the rich? Less than,... well it depends. Lower than 10% for many.

I think I need to write a book. I have been thinking about this a long time.

[DRaymond]

The information here is a bit insufficient. If Cindy McCain has a regular monthly Amex bill of between 250 and 500 thousand dollars and she pays it off every month on time then 0% is normal.

If on the other hand Amex just happened to give a Senator's wife a half million dollar credit line and 'pay it off whenever you like, no interest'. Then let's not mince words...it is a bribe and it was illegal to either give it or to take it.

[Mike O.]

My bank gave me an interest free loan because I secured it with an interest bearing CD for the loan amount. Net result: I MADE money by taking the loan. Was that a bribe too, or just prudent money management?

You people are simply jealous of her fortune which was passed to her by her family. What was she supposed to do, not accept it? Give it to you because you are jealous? Jealousy is very ugly.

Idiot.

[dec8ur]

As the wife of a public official, if she is getting a zero interest loan from a company that in most assuradly does business with her husband (he is a public offical. then that is wrong.if obama's v.p. vetter had to resign from his unpaid post becaause of favorable loans from countrywide, does it look better for a nominees wife?

[JBS]

Was that a bribe too, or just prudent money management?

That depends. Are you an elected official who sits on the Senate Commerce Committee with jurisdiction over economic development and consumer affairs?

[Amalek]

Mike, you really need to take a personal finance course. You did not make money. You got screwed.

[Amalek]

Spending a quarter of a mill a month on your credit card is not exactly the role model we want in a first lady.

[ObserverinVancouver]

This is an issue that can resonate with millions of voters. American Express gives the McCains a credit limit of $250,000 with no interest payable, ever. And you, you pathetic, little carbon-based work unit, you taxpaying schlub - what kind of a deal do you get, what's your credit card limit and what's your interest rate? Even if people don't pick up quickly on the conflict of interest, they can easily figure out - THIS AIN'T FAIR.

[MoeJava]

How selfish of the McCains... they already have more money than the US Treasury, while Americans are facing a 48% home forclosure rate, and just barely able to support their families.

The McCain's seriously could have paid this off in the *blink of an eye* but continue to "use" Amex's money instead.

Great example of Republican spend spend spend and leave the pay off to another group at another time.

[Mike O.]

"...Americans are facing a 48% home forclosure rate, and just barely able to support their families."

That is the most uninformed statement that I have seen here. Your ignorance is shining through. America would be in financial ruin if the default rate was 48% as you claim.

[ladyv]

AMEX is a charge card, not a credit card. There is no such thing as an AMEX "credit limit." It's a charge limit, not a credit limit. There's no such thing - supposedly - as carrying a balance month to month. That's what makes it a credit card. She may have a sky high maximum charge/month limit - probably has an AMEX Black - but she's supposed to pay it off every month.

If she's running up 250-500k/month and paying it off, then her AMEX is just like everyone else's AMEX, because she's using it as a charge card. If she's being allowed to carry a balance from month to month, it's just become a credit card, and that's not what AMEX is supposed to be. For AMEX to allow anyone to use a charge account like a credit account...something odd is going on.

Even if she *is* charging a half million a month and then paying it off each month, that's a really interesting and immediately stunning way to drive home to voters just exactly how wealthy McCain is, though. In economic times like this, that's not an attractive quality to have driven home with voters.

[mairs]

Well that is not a surprise. Money is very expensive if you have little of it. Money is cheaply procured if you are wealthy.

[thecanadian]

But - didn't he say (or she said) that she has nothing to do with the election so therefore she didn't have to submit any financial information regarding the Election requirements to file?

Am I wrong?

[thecanadian]

BUT all the Credit Cards - debts are in her name!

[incontempt]

This smells bad...real bad

a dem got a low interest home loan and is somehow in ill favor with who? The accuser has huge "credit cards" with 0% interest....is this an expense account paid by ? oil or who exactly has paid on these accounts? there is something a little too sweethear and very shady going on here.

[skr831]

The question to ask is how did John McCain vote on the bill to allow credit card companies to charge outrageous interest? If McCain voted to allow the credit card gouging and he's getting a zero percent loan on more than 100k, that's not elitist, that's just taking advantage of his position, much like getting benefits for being completely disabled ($58,000/year) and receiving a salary from the Senate for presumably working a full time job. Well, Tuesday through Thursday. That is full time for a Senator.

[mairs]

I'm trying again, as my post was removed. If you have a Platinum card which has a $300 yearly membership fee, you don't have to pay off your balance each month.

[smark]

But then do we all get 0% interest on 100s of thousands of dollars if we get a Platinum card?

[Raven]

Um, Seth, I hate to rain on your parade but, well...

I detest John McSame. His ability to convince Americans that he is trustworthy, honest, and one of them - well, it's shocking. He's a swindler of values.

But on the American Express thing, you're off the mark. Sure it's a clue into his personal life. And that's valid. He is carrying $100k on his American Express card. That's sets him apart from 99% of the rest of America.

But it's not a sweetheart deal. American Express cards don't carry interest because cardholders pay the balance off EACH MONTH and pay an annual fee for the card. Amex also makes money from merchants, which sets them apart from others, but that's another story.

The shock of the American Express story isn't the lack of interest. It's the idea that down home straight shootin' bullshitter is richer than bloody hell.

Just tell that story, Seth. It's enough.

[JoeInWynnewoodPA]

Re: that's how Amex works

Well yes, IF you pay the balance in full, but:

"According to the May 15, 2008 disclosure form, though, during 2007 Cindy McCain
originated an individual debt of between $250,000 and $500,000 with a zero-percent
interest AmEx that was still not paid off by the time of the time of that filing."

that certainly isn't the case here. If I fail to pay the FULL amount on the due date - usually 15 days from the bill date - it's a rather hefty double-digit finance charge.

[mairs]

If you have a Platinum card, which costs $300 a year in membership, you don't have to pay off the balance each month.

All credit card companies make money from merchants. I'm one of them. American Express just takes a higher cut plus a monthly fee.

[HWNA]

"According to the May 15, 2008 disclosure form, though, during 2007 Cindy McCain originated an individual debt of between $250,000 and $500,000 with a zero-percent interest AmEx that was still not paid off by the time of the time of that filing."

Would that not indicate that the balance was in fact not paid monthly?

[Raven]

Not necessarily.

The real story here is that the McCains are ULTRA rich. And yes, they use credit cards, and yes they generally pay off the entire balance each month.

That doesn't mean they won't run up another 100k or 200k next month.

At their income level, they think that's normal.

And that here is the real story, not the fact that American Express doesn't charge them any more interest than they charge anyone else.

These folks are so bloody rich they can easily carry this debt. That's not exactly the down-home straight shootin' kind of guy McCain likes folks to think he is.

[Liberal2]

Ummm, what kind of monthly expenses does the McCain household have that they have a recurring 100K card debt each month? Why don't they simply write a check instead? Nahhhh, sounds like a 100K loan at a 0% interest rate. He's using his wife's card to pay for things that his campaign should be charged for.

[SayonaraSnot]

Because writing one check each month to a credit card company is easier than writing a bunch of checks each month? Because credit cards are an easier way to pay monthly recurring bills, especially when you're on the road a lot? Because you can rack up points and miles through credit card use???

I use my credit cards for literally ALL my expenses each month - I don't even have a debit card - and I write one check every month and pay it off. I have points and miles coming out of my ass as a result, not to mention a great credit score.

[curmudgeon3]

I've had an American Express card for the past several years (no annual fee), and just checked my account, since my next payment is due in about ten days. I can avoid any and all penalties and fees (paying interest of course) by making a minimum payment that amounts to slightly less than 4% of the outstanding balance.

And there are people paying $300/year for this privilege?

[ObserverinVancouver]

$100,000 on a zero interest credit card - and they call Sen. Obama elitist. Sheesh.

[zann]

Here's another thing I can't get past: McCain, who is contending that he's perfectly healthy and opposes both government waste and the GI bill, gets a $54,000 disability pension.

[incontempt]

Yes he is Soaking up the Social security like it's going out of style...oh wait...it's going broke, but he gets his.

[tschlak]

Honestly -- how could you find out how a person could get a 6-figure 0% line of credit (that's basically what it is) from Amex? Is it because they have an obscenely large portfolio of Amex stock? Is it because of Cindy's wealth? Do all uber-rich people have access to lines of credit such as this? I wouldn't have thought they needed it, but if it's offered...

[incontempt]

I suspect one of his interests/lobbying firms pay those bills.

[ladyv]

it's not a line of credit. It's a charge limit. AMEX ups the charge limit depending upon the person's ability to pay. If you could pay off $500k/month, they will let you charge $500k/month.

The story here isn't that the McCain's have typical multi-multi-multi millionaire AMEX accounts. The story here is that the McCains are typical multi-multi-multi millionaires.

[LisainNYC]

I'm not ready to laugh, I'm ready to scream.

No wonder they have so much credit card debt. There's no incentive to pay off interest free loans. And meanwhile, McCain has the nerve to show no sympathy to homeowners who are facing foreclosure on their subprime mortgages!!

[ObserverinVancouver]

Hoo boy! Good point.

[Collielady]

This epitomizes the fact that the elected officials who are supposed to represent the rest of us, really don't at all. This is a great American farce. Anyone who carries a credit card balance of $100 grand can't relate to the rest of us. And the McCain camp talks about Obama's elitism.

Truth is, they're all elitist. Can you imagine sending your neighbor to Washington to represent you? I can, very easily, because that would be true representation. It doesn't take a Washington lawyer to know right from wrong.

[zyxt]

I called American Express and asked for O% on my account and if not that I would close the account -- I ask for an explanation of why McCain is getting off for free. Do you think they will return my call?
"The trouble with political jokes is that they so frequently get elected."

[BethStuart]

Getting an interest-free six figure loan even for a few months sounds like a sweatheart deal. Where do I sign up for something like that?

[filo]

Nice work if you can get it.

and if you can get it.....

[SouthFloridaDem]

Sounds like that special consideration loan Obama's Veep vetter had to quit his job over. So this zero-percent six-figure loan to a presidential candidate means nothing/

[p2p2008]

Now I have a very good excuse for cancelling AMERICAN EXPRESS CARD. Anybody know if VISA, or Mastercard doing the same thing not just for McCain but for other politicians too?

[IkeChicago]

You had better know that the credit card company pass on this to us stiffs, they have to make money, that's why they're in business.

And John McCain was complaining that Johnson had a low interest rate. How do you explaining this John McCain, I'm betting voters are going to be mad as hell and will not take it anymore.

[ObserverinVancouver]

The maximum below Countryline's posted rate that Johnson had was 75 basis points. That is peanuts. There are tons of reasons you can get a rate that's lower than what they post. One example - what is the appraised value compared to the outstanding debt? I think this business of Johnson's mortgages is a non-issue and if the reporters who reported on this did their jobs and dug around, they would know it. But they've invested too much in the exaggerations to slink back and admit they were wrong.