Robert F. Kennedy, Jr. recently disclosed financial information revealing that he is carrying a staggering credit card debt ranging from $610,000 to $1.2 million. These debts are associated with high-interest rates between 23.24% and 23.49%, significantly above the national average of 20.13%, according to Bankrate. This revelation comes amidst a broader context where Americans' credit card balances have surged to an unprecedented $1.17 trillion in 2024.
Kennedy's financial situation highlights a larger trend among American consumers, particularly those with higher incomes. According to Bankrate's research, 59% of borrowers earning $100,000 or more have been in debt for at least a year, and 24% have carried credit card debt for five years or more. This scenario is not uncommon, as higher-income individuals often receive higher credit limits, which can lead to financial trouble if not managed properly.
"Higher-income people often get higher credit limits, and sometimes that gets people into trouble." – Ted Rossman, senior industry analyst at Bankrate.
The specifics of Kennedy's debt reveal potential financial challenges ahead. If he opts to pay off the lower end of his debt, estimated at $610,000, by making monthly payments of $50,000, it will take approximately 15 months to clear the balance. However, if his total debt reaches the $1.2 million mark, the same monthly payments would extend the repayment period to 33 months and incur around $434,000 in interest charges.
"That's a truly massive amount of credit card debt." – Ted Rossman, senior industry analyst at Bankrate.
In a broader context, this issue is exacerbated by economic factors affecting many Americans. The average debt per credit card borrower was reported at $6,380 in the third quarter of 2024 by TransUnion. Additionally, average unsecured debt, excluding real property like cars or homes, increased by 8% to $29,364 in 2024, according to Money Management International. These figures illustrate the growing financial burden faced by consumers across various income levels.
"With inflation being so powerful and so stubborn, it's just shrunken a lot of people's financial wiggle room down to zero." – Matt Schulz, chief credit analyst at LendingTree.
Experts caution against using credit cards as a primary borrowing strategy, especially for those with considerable wealth. Charlie Douglas, a certified financial planner, emphasizes that credit cards are not typically the most effective means for the wealthy to borrow money. Moreover, some experts suggest that Americans view credit cards as a de facto emergency fund, which can lead to ongoing debt cycles.
"If you're paying down credit card debt at 20%, that's a guaranteed risk-free, tax-free return." – Ted Rossman, senior industry analyst at Bankrate.