McCain inhabits another world

by Jay Stevens

John McCain and his wife racked up $100K in credit card debt! Ouch! Boy, I hate to see those interest payments:

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.

Two Americas. One for you and me, where we work our tails off just to make ends meet. The other for folks like John McCain, where all the rules are rigged in his favor.

  1. Ayn Rand

    And you, Jay, will not have to pay off their debt as you would like us to do for others that made bad decisions on home loans.

  2. goof houlihan

    Personally, I don’t mind that a few rules are rigged in favor of a holder of the nation’s highest award for valor.

  3. Scott

    …We will just have to pay off the debt racked up by Bush and McCain in their pursuit of endless war and tax cuts for the rich…

  4. Ayn Rand

    ahh Scott, just put it on a credit card ( no interest). You guys got no solutions just bitching. get over it.

  5. goof houlihan

    How does a nation on welfare pay off anything, Scott?Obama just wants the whole country suckin on the federal tit. And there are plenty of “the world owes me a livin” grasshoppers willing to line up to do just that.

    Many people work two jobs, yes, “work their tails off” and do more than just make ends meet. Of course, it’s the “rules” that are “rigged in their favor” not their hard work, apparently, that give them the rewards of their hard work and risk taking and decision making.

    Why is it only those just getting by “work their tails off” in your world, Jay? There are still lots of people livin the american dream here, Jay, which is why we still see people breakin down the doors to get in.

  6. Jim Lang

    Gee, I want the same deal as Cindy McCain. Back when I had an American Express card, you were required to pay it off every month. Has that changed?

  7. goof houlihan

    Jim, the answer is sorta like McCain’s underwear….”depends”.

    Cindy may have other financial activity that compensates for the interest lost on the card.

  8. Goof, I’ll happily let you get away with a lot of BS. But some stuff is just too much. John McCain is *not* the holder of the nations highest citation for valor. That would be the Congressional Medal of Honor. You’ll notice that that pretty powder blue reminder of heroism does not grace McCain’s uniform.

  9. Nix Olman

    Brief personal finance lesson for Jay Stevens.

    1. Interest rates on credit cards, as well as all other terms, are negotiable.

    2. Credit card issuers charge merchants a percentage of each transaction, usually in the one to four percent range.

    3. Thus, you can easily negotiate a zero percent interest rate credit card if you rack up enough charges, because the card issuer will be making more money off the merchants.

  10. While ya’all debate the merits of no interest lines of credit (that weren’t really granted under those original terms), my thoughts on this have me wondering why McCain, along with his super-rich wife, can’t seem to live within their means.

    With the kind of money both of them make, you’d think they’d be able to pay the bills.

    Now – what does that say for his ability to balance the U.S. budget?

    Despite the fact that they seemingly have the means to pay it – why not pay it? Are they that irresponsible? For more than a year?

    Yeah – that’s the kind of responsibility I want in the Whitehouse! What about you?

  11. goof houlihan

    Wulfgar, you’re right and corrected me on a something I’ve thought for eight or ten years.

    jhwygirl, having some credit card debt at zero interest doesn’t say, “they’re living beyond their means”. Does having a mortgage at five percent (!) mean that you’re “living beyond your means”? Of course not, it means you’re using leverage, and as long as you can pay the monthly payment, it’s helping you achieve your goals.

    Debt financing is common and commonly known among capitalists.

  12. goof houlihan

    I think what it says about McCain is that he understands money.

    I’m not sure what your post says about your understanding of finance, though. I own debt from some of the most successful entities ever. Somebody loaned them the money, I bought a piece of the loan, and twice a year those very successful entities pay me interest.

    Many a Montanan has gotten their start, not just going into debt, but also being helped by an entity that is itself in debt, the Montana Board of Housing.

  13. But geez, goof – in McCain’s credit situation outlined here, other cardholders are financing his debt…and it’s a pretty good stretch to call what he is doing as capitalist financing – especially since it is sans-interest.

    Of course, American Express sure is getting a whole lot of free advertising out there with a presidential candidate using its card.

    The situation you cite in your second comment is apples to McCain’s AmEx oranges – you are making money in interest payments from someone’s apples – McCain’s oranges aren’t even paying interest.

    AND (whew!) saying that paying for his ride on credit shows he understands money – especially when he could (seemingly) pay for it on his own scares me – shouldn’t he be paying as he goes? Otherwise, it appears he’s got a lot of frivolous “earmarks” in his budget that are eating up his cash-on-hand.

    I’m surprised that you’d be advocating living beyond your means, especially with the astronomical national debt that will be passed on to America’s sons and daughters and grandchildren.

  14. goof houlihan

    But he’s not living beyond his means if he can, one, pay the debt at any time, which is not usual, or two, service the debt.

    Yes, many americans misuse debt. But many, many, many, many, many, more, many more!, use debt as a financial tool to help them achieve their goals. In particular, their house mortgage, but also, for the many small businesses, as a way to meet the cash flow requirements of a rapidly growing business.

    Now, contrast that to Barry’s idea that people in america are too stupid to understand debt, such as credit card or mortgages, and therefore need careful hand holding by the government.

  15. I don’t know that Barry is wrong – but me, I’d expand that more, given the current mortgage foreclosure crisis – perhaps both “people in America” and their banks aren’t smart enough to understand both debt and risk.

    It’s not like the mortgage crisis isn’t playing a damned big role in crushing our economy right now – it’s made that hold a bit deeper to get out of, given that we’ve now got fuel costs fueling the recession (yep, recession).

    You are still citing situations that have people paying interest, goof (house mortgages, small business loans) – and those, again, are apples to McCain’s interest-free oranges.

    In these times, McCain should be living within his means, paying the bills, instead of letting them lay on the kitchen table for months on end. It’s irresponsible at the very least. He has the ability to pay that bill.

    Isn’t he – or wasn’t he – running his campaign the same way? Using Cindy’s jet to get around and campaign? Not charging that kind of activity to the campaign?

    Seriously – for all the previous discourse about how Bill’s private life was reflective of his presidency, McCain’s living-beyond-his-means American Express bill is certainly indicative of his thoughts on budgetary control.

  16. JC

    Actually, I think the problem with the McCains huge CC debt really has nothing to do with the mechanics of interest, or any of the such. What it does is put out the message that it is OK to run up huge CC debt.

    If it’s OK for John and Cindy, then it is OK for the average American to run up and max out their CC debt. We all know that credit card debt is a huge problem in this country.

    And that’s why Obama has introduced legislation on transparency for CC agreements, and supports a CC bill of rights to protect consumers.

  17. goof houlihan

    Interest free debt is the best kind. Again, you don’t have any evidence that the McCain’s aren’t living within their means. Nor do you present any evidence that they don’t have other arrangements that compensate the company for the loss of direct interest, minimum investment balances, for example.

    “If it’s ok for John and Cindy, then it’s ok for everyone” is nonsense. This hatred of the rich, and lusting after their money, is a sickness and moral failing of the democrats. It’s ok for John and Cindy to have credit card debt because they can service it, the same as a middle class family services their mortgage. It’s ok to me that their credit card is interest free because I have no doubt they pay it elsewhere, otherwise. Debt has no morality, it can be good or bad depending on how it’s used and how it’s incurred.

    HIGH interest is more of a moral issue, even frowned on biblically, I think.

    I’ve never felt the need for big government to protect me, JC. Not from my credit card decisions, not from what I eat or smoke or drink, not from my reproductive decisions, and certainly not from my marital decisions. I just don’t want big government in my life the way you authoritarians do.

  18. Jim Lang

    The point is that John McCain is irresponsible with money.

    Undeniable, given the facts, and not surprising, since he’s never had to work a regular job.

  19. JC

    Goof, but I assume you want your government to protect you from terrorists. How about to protect your rights about things like habeus corpus?

    You write about usury being immoral, yet we see much of it in the credit card industry. Who is going to protect us from that immorality when the leaders of our churches do nothing about it.

    Your problem Goof, is that you only see the world through a single pair of lenses, and the only good in our government is that which suits your unitary vision.

    I can accept that, which is why I fight against a status quo that people like you try to impose upon the rest of us.

    But what really mystifies me is how you can so quickly pan the importance of role-modeling in our country. Then again, if your role models have been people like George W. Bush and Richard Nixon then maybe I can see why how a president live his life isn’t importance to any of the rest of us.

  20. Long term debt held on a zero interest credit card sounds more like an illegal loan.

  21. Ayn Rand

    Hey Clamedia, Pat Williams worked on interest free check kiting while in the House of Reps. I’m, sure since he did it, it’s OK.

  22. Clamedia?

    I haven’t seen any commenters here with that name. Do you care to clarify?

  23. Ayn Rand

    Oh sorry C(lamedia) Poetic license!!

  24. goof houlihan

    “Then again, if your role models have been people like George W. Bush and Richard Nixon then maybe I can see why how a president live his life isn’t importance to any of the rest of us.”

    Good thing they aren’t then, I reckon. But nice try with the straw man.

  25. goof houlihan

    Not aimed at any person, you understand, but I always detested clamdippia. Good way to ruin a chip.

  26. Mayor of Mayhem

    If you have alot of money. It is smart to leave your money in an interest bearing account of some type and use interest free or very low interest money. Therefore your money makes more money than you pay to use someone elses money. This is just smart. Many americans purchase cars at zero interest when they have the funds to pay for the cars. The idea is make three or four percent on your savings while using ford motor credit or GMAC to carry your car debt. It isn’t unusual that the McCains spend that much money. The credit companies still make an average of three percent from the vendors who except the cards, so everyone is happy. It would be better to see McCain pay his bills as he goes, but I’m sure most republicans understand what he is doing.

  27. speaking of interest rates. how does 676% interest sound for the interest rate currently allowed by state law to be charged our poor, seniors and disabled accross Montana at pay day loan / vehicle title loan businesses? I have investigated these places and I found out some things that opened my eyes. If you are curious about how the poor, elderly and disabled are treated by creditors check this out:

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