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

[obamanation31]

Welfare for the rich and powerful. He's so out of touch.

[ZekeBundren]

John McCain is a Senator.

The idea any U.S. Senator can be neutral voting on credit card issues with AMEX holding six figures in debt, some at 0% interest, is contemptible.

As is McCain.

This is not his first ethical failing, and the list will be a lot longer by November.

[Cypress]

Credit card companies charge interest rates based on the prime lending rate and the best rates are given to the most credit worth customers. Why not take advantage of the lowest purchasing power of the dollar in recent history. While keeping your own money invested working hard to over come this stifuling inflation. Why not take advantage of the arbitrage created by this free loan from American Express. Putting it to work making more money. Simultaneouly taking advantage of the sale price that is greater than the purchase price of the investments. While the average American family struggles with the increased cost of basic necessities. Yes, this zero interest loan is a riskless investment. Made to a public official who has the American people's best interest at heart.

[Tommygun264]

Credit card companies USED to set interest rates based on the prime lending rate. But then Regan and the 'pubs did away with regulations that limited the amount of interest credit card companies can charge, making them in effect legalized loan sharks. Instead of refusing to extend credit to people who can't afford it, they will extend credit to anyone, then jack up the interest rates on customers without warning for excuses as flimsy as the customer's payment was not marked received until a few minutes after the specified payment deadline - the payment could have arrived days or weeks earlier, but it wasn't opened and entered as recieved on time. And guess who votes on the legislation which makes it all legal?

[RadCenter]

And these are the people who made such a big deal out of John Edwards' expensive haircut?

I wonder what Cindy pays for her extensions­...

[kellygrrrl]

those Chanel suits - St John knits - Louis Vuitton bags - Prada sweaters - Hermes scarves - Ralph Lauren boots - Gucci sandals -- add up to more than 100 grand a month

he!! - her bra and panties cost more than your last family vacation

[kellygrrrl]

I'm sure Cindy Lou's Black AMEX goes through at least 100Grand / month

Dang! that's one trip to Rodeo Drive for her type

[Tommygun264]

The 0% interest thing is even more galling when you consider that it's on American Express cards. AMEX doesn't just charge users more fees and interest that Mastercard or VISA, they also charge merchants 1 to 2 percent more in transaction fees (4% or 5% of the transaction price as opposed to the usual 3% charged by Mastercard and VISA). That's right - merchants have to pay a percentage of their sales to the credit card customers as well as the credit card users. That's why so many merchants who accept all other cards don't accept American Express. So while AMEX gouges the "common" folk and small businesses, they're literally giving their wealthiest clients a free ride.

[Mike O.]

"...4% or 5% of the transaction price as opposed to the usual 3% charged by Mastercard and VISA..."

I have an AMEX merchant account and we pay 2.75% per transaction.

Caution: Math content...

Q: What is 3% of $100,000.0­0
A: $3,000.00

When is the last time any of the commenters here have provided $3,000.00 in merchant fees to AMEX? Your TOTAL BALANCE is probably much less than that.

Of course AMEX is willing to provide them 0% interest. AMEX wants the McCain's to continue running transactions so that AMEX continues to make their merchant fees.

If I were the McCains, I would demand 0% interest as well. So would you, so stop complaining. You're all just a bunch of jealous hypocrites.

[layman]

WHO YOU SLEEP WITH DOES MATTER..
THE THUG AND THIEF, THE BUSHES, THE MCBUSHES, ALL GO TO BED WITH THE CREDIT CARD, MORTGAGE, AND FINANCE INSTITUTIONS IN THIS COUNTRY OF "DEMOCRACY".

[gomonkeygo]

I've beaten my head against walls trying to get lower rates out of my credit card companies. Best any would do is knock a point or two off - and I have a credit rating and a full-time professional job!

I call it elitist wealthy favoritism of the worst f#@%ing kind.

[Mike O.]

The answers to the following questions are the only relevant factors in setting your interest rate:
1.) What is your net worth?
2.) How much do want to borrow?

The lower the Loan/Worth ratio, the lower the interest rate. It really is that simple.

There will always be those who have more than you and there will always be those who have less than you. If you aren't happy with your situattion, then take some responsibility and change it. I guess it's just easier to sit here and b1tch about it.

[skip4Obama]

With all the pain and difficulties the avg middle family has these days, it is just disgusting that that have a zero % deal on that debt. Everyone should call American express and demand thhe same deal or cancel American Express!

[kats]

Anyone with good credit can get 0% interest..­.it just depends on the card. I have 2 cards right now with 0% and that interest rate is for 1 year allowing me to pay off the cards before I have to pay interest. BTW I'm retired and lower middle class and not a McBush supporter.

[Tommygun264]

And at the end of the first year you pay a renewal fee and have an interest rate set based on your spending history. The McSame's aren't savvy consumers taking advantage of an introductory rate. And this is just a guess, but I'm fairly certain you can't charge up to $250,000 on that card of yours.

[BEHM777]

Your 0% rate expires after a proscribed period. Theirs is PERMANENT. That is the difference.

[Mike O.]

Change cards again. I've done that for years with my business. I haven't paid interest for years on my business cards.

Use your brains and manage your money well. It's your own fault if you get yourself into debt that you can't repay. It's your own fault if you destroy your credit rating. It's your own fault if you aren't clever enough to find a way to make take advatage of the credit card companies.

[XME]

True, but they seem to be getting an endless 0% interest rate...ave­rage Americans can NOT get that.

[rabprevent]

I GUESS THIS IS JUST ANOTHER EXAMPLE OF ELITHIST BEING OUT OF TOUCH AND TO THINK THAT MOST CC COMPANIES ARE GOUGING THE AVERAGE AMERICAN TO THE TUNE OF 30% FEES ON PURCHASES, THIS WOULD HELP EXPLAIN WHY, THE RICH GETS TO PAY NO INTEREST WHILE THE REMAINING WORKING CLASS PAYS FOR THEM NOT HAVING TO PAY INTEREST.

THE FLIPPER HAS THE AUDACITY TO CALL OBAMA AN ELITHIST? WHICH ONE OF US CAN CARRY A BALANCE OF 250K WITHOUT ANY INTEREST WHATSOEVER­!!!!!!!!!!

AGAIN, THE NERVE TO CALL A WORKING MAN 'ELITHIST" THIS HELPS ENSURE THAT THE RICH PLAYS BY THEIR OWN RULES AS USUAL

[hmmmmmer]

0%, I am sure he isn't the only one in this situation, but give me a break, it is no wonder then how they can be so callous about the little guy getting into credit card problems. It would seem though that they could do something about a card starting out at 12% and the through a series of whatevers shoots to 30%. I guess the higher rates are so people like McSame can have a 0%.

[catchsandy]

Hey, isnt that Mccain sipping a latte??? Imagine how people would have pounced if obama is caught in the same way!!!

[Tommygun264]

They're not getting ready to climb into a Volvo either.

[KMKY]

This is not at all like the Countrywide Mortgage problem. (False analogy rears its head again.) Charge card rates are often negotiable for as long as you use the card, depending on what your credit history is and what you need the card for. If they made a large purchase at some point, then they probably worked out a deal, and they probably put it on their Am/Ex in order to get points for other things. The McCains are wealthy. So what?

And they do have another daughter who is a minor; she might be the dependant child as well.

[jupitor]

You don't get it do you KMKY? This is a sweet heart deal that should not be allowed, as it puts the rich in a class that the average person cannot inter. There is 0% interest, while the rest of us are paying their substeys of % for them. Man no politician should go for this type of thing? If they get this kind of deal and the American public don't------What does that tell you KMKY? Does some thing stink in Denmark-------Kind of like the way Mccains campagne party is made up of lobbyist?

[applespider]

Where was McCain when the Congress voted in accordance with the credit card lobby to make it harder for Americans to declare bankruptcy?

[jpcline004]

Why does it have to be that he doesn't "get it"? Can't he disagree?

I think its a false analogy too. AMEX makes all their money through transaction charges to vendors and stores. Uber rich people who charge a lot make a ton of fees, so to keep them happy AMEX doesn't bother with charging them interest. Plus most AMEX cards make you pay them off each month. Do I think its ethical for a public servant to have on of these? NO. But its not some special deal he got.

On the other hand, what bothered me about Dodd was the manner of the transaction, he is friends with the CEO of Countrywide. He got a special deal. Whether or not it creates a conflict of interests is debatable.

[plooger]

It's not about the generic "wealthy" person. This is about perceived or actual conflict of interest (no pun intended), and a Presidential candidate who has been berating his opponent for association with people receiving similar "better than market rate" deals. But this isn't an associate, it is the candidate himself... with ZERO degrees of separation­... a direct conflict of interest.

[KMKY]

My problem with this article is that because the author implies that the 0% interest rate is akin to the Countrywide mortgage loans does not make it so. The two are not comparable. Now, if John McCain does something special for Am/Ex lobbyists in exchange for this, then there is a serious problem. And the reason he has been berating Barack Obama for Jim Johnson is because Obama came out specifically against Countrywide on the campaign trail and then turned directly to Johnson for his first decision as the Dem. nominee. He was probably influenced by Kerry on that one, and he did the right thing by accepting his resignation. But he is going to be scrutinized for every little decision he makes in regard to reform, transparency, ethics, severing lobbying ties, etc., because it has been an integral part of his campaign's narrative. I quite frankly wish we could stick to issues other than the gotcha scavenger hunt that hounded the primary season. An issue related to this article might be: how do the candidates propose to reform the credit industry?

[Mike O.]

This deal is NOT "better than market rate". Drive your net worth to $500M and then tell AMEX you want a $100K credit line with 0% interest. Promise them that you "max it out", thereby guaranteeing AMEX $3000.00 in fees and they will be happy to extend one to you as well.

Get over it.

[Turtleluv6]

I wonder if his dark skinned step daughter has a charge card? Since she is never included in any family photo's

[VOTER]

Meet the McZeros!

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