BLACKS, HISPANICS CARRY MORE DEBT.Byline: JULIA M. SCOTT Staff Writer African-American and Hispanic families are more likely to carry credit card debt Credit card debt is an example of unsecured consumer debt, accessed through ISO 7810 plastic credit cards. Debt results when a client of a credit card company purchases an item or service through the card system. and be under financial distress Financial distress Events preceding and including bankruptcy, such as violation of loan contracts. than whites, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a study released Thursday by the Tomas Rivera Policy Institute, a Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. think tank. ``Ethnic and racial minorities are particularly at risk because of their lower earning capacity, lower wealth holdings and relatively higher unemployment rates,'' wrote Waldo Lopez-Aqueres, the primary researcher and author of the study. Fifty percent of African-American families have credit card debt versus 45 percent of Hispanic families and 35 percent of whites, the study found. Hispanics also spent a larger portion of their income paying off debt, 31 percent compared with 22 percent for whites and African-Americans. And more Hispanics are getting credit cards these days. In 1992, 43 percent of Hispanics had credit cards, compared with 53 percent in 2001. That is still much lower than the 82 percent of whites who have credit cards. The findings did not surprise Jack Kyser, chief economist The Chief Economist is a single position job class having primary responsibility for the development, coordination, and production of economic and financial analysis. It is distinguished from the other economist positions by the broader scope of responsibility encompassing the at the Los Angeles County Economic Development Corp. ``The culture is that they get their paycheck and then they go out and spend it all,'' Kyser said. ``So this does make sense in that they pile on a lot of credit-card debt.'' When debt mounts, Hispanics are more likely to seek out credit counseling, the study found. But during two focus groups conducted as part of the study, 20 Hispanics living in Los Angeles reported mixed experiences with credit counseling agencies. Hispanics enjoyed lower finance charges negotiated by credit counselors, the ease of making one payment to the counseling agency rather than separate ones to various creditors and free financial literacy classes. However, participants said they were socked with high initial payments, monthly retainers from counseling agencies to cover administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. and underestimates of the time it takes to pay off debt. Researchers conducted the survey over 13 months in 2004 and 2005 and analyzed the Federal Reserve Bank's National Survey of Consumer Finances The Survey of Consumer Finances (SCF) is a triennial survey of the balance sheet, pension, income, and other demographic characteristics of U.S. families. The survey also gathers information on the use of financial institutions. The study is sponsored by the U.S. , reviewed complaints filed with the Los Angeles County Consumer Affairs Department, and surveyed credit counseling agencies via the mail. julia.scott@dailynews.com (818) 713-3735 |
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