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Robert F. Kennedy Jr., who has been nominated by former President Donald Trump for the position of Health and Human Services secretary, recently came under scrutiny regarding his financial practices. Testifying before the Senate Finance Committee, he disclosed a staggering credit card debt amounting to between $610,000 and $1.2 million, an unusual situation even for someone with considerable wealth.
Kennedy’s financial filings reveal that his credit card accounts carry interest rates ranging from 23.24% to 23.49%. This significant debt is concerning, particularly in light of the current financial climate in the U.S., where consumer credit card balances reached an unprecedented $1.17 trillion in 2024. Wealthy individuals, like Kennedy, are not exempt from these mounting obligations.
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Financial experts have voiced alarm over such high debt. Ted Rossman, a senior industry analyst at Bankrate, commented, “That’s a truly massive amount of credit card debt.” Carolyn McClanahan, a certified financial planner, expressed confusion about Kennedy’s situation, noting, “He has a lot of income, so I don’t even know why you’d have all that debt if you have that much income.” Kennedy did not provide immediate comments on the matter.
Credit Cards as a Financial Crutch
The escalation in credit card debt isn’t restricted to the affluent. Financial analysts have observed that many individuals, regardless of income level, have turned to credit cards as a form of emergency funding amid increasing inflation. Matt Schulz, chief credit analyst at LendingTree, stated, “With inflation being so powerful and so stubborn, it’s just shrunk a lot of people’s financial wiggle room down to zero.” As a result, many Americans have begun to rely on their credit cards to manage everyday expenses.
The consequences of accumulating such debt can be severe. While Kennedy’s financial disclosures provide a snapshot of his situation, they do not clarify whether he consistently pays off his balances each month. If he were to allocate $50,000 monthly towards repaying an estimated $610,000 balance, it could take him approximately 15 months to become debt-free, incurring around $93,000 in interest. Conversely, paying off the higher balance of $1.2 million at the same rate could require over two years and cost nearly $434,000 in interest.
Experts advise that accelerating debt repayment is a wise course of action. This advice holds true not just for the wealthy but for average consumers as well. According to TransUnion, the average credit card debt per borrower as of the third quarter of 2024 was $6,380, while the current average interest rate stands at 20.13%. Many consumers are also managing additional debts; unsecured debt climbed significantly, reaching an average of $29,364 in 2024.
The Financial Imperative of Debt Repayment
Given the high interest rates characteristic of many credit cards, financial experts suggest that prioritizing debt repayment is often more beneficial than pursuing investments or savings. Rossman highlighted, “If you’re paying down credit card debt at 20%, that’s a guaranteed risk-free, tax-free return. You’re unlikely to get that much from your investments.”
Moreover, it’s noteworthy that a significant portion of high-income individuals also carries long-term credit card debt. According to Bankrate’s findings, 59% of those earning $100,000 or more have faced debt for over a year, with 24% remaining in credit card debt for five years or more. Rossman elaborated that “higher-income people often get higher credit limits, and sometimes that gets people into trouble.”
While high-net-worth individuals might carry substantial credit card debt, they also often possess access to limited services and perks associated with premium credit cards. For instance, the American Express Centurion Card, known as the Black Card, comes with high fees in exchange for various luxury benefits. However, borrowing through credit cards isn’t necessarily the most strategic option for the wealthy. Charlie Douglas, a financial planner specializing in ultra-high-net-worth families, recommends establishing a line of credit to avoid liquidating investments and incurring capital gains taxes for significant purchases.
He also suggests maintaining a liquidity buffer equivalent to up to one year’s worth of expenses in cash for added financial security.
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