The middle class in American society has been dramatically affected by the recent credit crisis and subsequent economic challenges.
The segment of this population that’s taken the biggest hit may be middle-class African-Americans.
A recent study endorsed by the NAACP shows African-Americans face the most adverse consequences when it comes to credit card debt and higher interest rates.
The study, “Challenges of Credit Card Debt for the African-American Middle Class,” shows there is disproportionate suffering among African-Americans when compared with other groups.
According to Catherine Ruetschlin, a co-author of the report, “Unlike white households, more than half of African-Americans’ wealth is held in housing, which was devastated in the financial crisis.”
The report goes on to say African-Americans are turning more to credit cards to cover household expenses, as incomes and unemployment continue to lag for this group.
In addition, there are other statistical anomalies that impact this demographic.
Late payments among African-Americans were roughly in line with other middle-class groups.
“The incidence of accounts going
to collection was higher.”
Nearly 71 percent of African-American households that were late on payments were targeted. This compares to around 50 percent of whites.
The Credit Card Accountability Responsibility and Disclosure Act passed in 2009 has led to better awareness among all Americans of their rights as consumers.
Since that act was passed, nearly one-third of indebted African-Americans reported being charged over-the-limit fees less often. One out of every four African-Americans has been charged late fees less often.
Source: afro.com. Photo source: www.atg.wa.gov