Infographic: The Transfer of Wealth to Rich Families Caused by Credit

30 Aug 2012

The Author

Kyle is the Editor of the DailyPerk, and is a member of the PerkStreet staff working on PR, marketing and content efforts at the Boston office. He is tasked with upholding the values of honesty and integrity and supporting the notion that PerkStreet and its customers should win together.

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INFOGRAPHIC: How Credit Cards Force Regular Folks to Pay the Rich

Kyle Psaty 16 Comments

Here at PerkStreet, we think credit cards are bad for a lot of reasons. The debt they entice people to accrue is probably the most obvious. But credit cards are also hurting many regular folks in this country who aren’t in terrible debt. Here’s an infographic we made showing how credit cards actually transfer wealth from normal families to rich families:

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Of course, rich families aren’t doing this on purpose. They’re just using credit cards to get the best rewards, since they spend so much money. Luckily, the onus to change this doesn’t rely solely on rich families. Your family can stop the cycle by switching from credit to debit.

Help PerkStreet spread the word about how regular families are giving $8.3 Billion to rich families every year. Share this infographic in social media, or embed it in your blog.

Kyle Psaty 16 Comments

JonCarter

This is kind of dumb. It’s like saying people who cut coupons and shop sales are “taking” money from those who don’t.
http://www.realscottsdaleliving.com Jon Griffith

Where is this information coming from and what’s the point? So the winners in a casino are winning the losers’ money…
Nick

Wrong, it is just more evidence that our economy is actually NOT a level playing field. Just one of the reasons how it is easier for the rich to become more rich, than it is for the poor to stay the same amount of poor.
Nick

Wrong. Because the rich aren’t cutting coupons here. The coupon comes from simply being rich. It is not a matter of strategy.
Nick

Kyle is cute
http://www.realscottsdaleliving.com Jon Griffith

News flash. Life is not a level playing field.
Melissa

But it is a matter of strategy……the rich are spending 13% more of their income on credit than the poor. You can’t get credit card rewards without spending money on your credit card. The poor would be better off just not having a credit card àt all, like the writer says.
Ivy

Work hard or go to college, but better your life. My parents made very little money, but I chose to go to college (on my own dime no loans, I worked my way through college) and now make more than 100k. The ones who say “poor me, I am not rich” will not ever have to worry about being rich.
Kate

The thought behind this infographic is great; don’t use credit cards if you don’t have the money to pay them back. But the idea that it turns the “rich” against the “poor” is not going to help anyone get out of debt. It just makes people say “make the rich pay my fees!” It is important to point out that the “rich” don’t pay fees because they pay their bills on time, not because they are rich. Plenty of “poor” people also pay their bills on time. And, in fact, if they are “poor,” using credit card rewards to your advantage, much like coupons as another person pointed out, can actually save you money. Let’s educate rather than start a class war.
http://Twitter.com/KylePs80 Kyle Psaty

Hey Kate. Thanks much for commenting. We appreciate your weighing in. Our purpose here is not to encourage class warfare, it’s to inform people about the system credit cards create. The message is not that if you don’t have the money to pay back your cards, you shouldn’t use them. (Although I personally agree with that advice so thanks.) The point of this infographic is to demonstrate what average people in different income brackets net from credit card use. This means that if you make a normal income and use a credit card responsibly, your neighbor likely does not use it responsibly. I hope this helps clarify the meaning.

-Kyle
http://Twitter.com/KylePs80 Kyle Psaty

Thanks guys. Let’s keep it civil. The point here is to step back and give people a better view of how the credit card industry impacts the average family at different income levels. Lots of the info we see about why credit cards are bad has to do with the way YOU use them as a consumer. This has to do with the way WE use them as a country.

-Kyle
http://Twitter.com/KylePs80 Kyle Psaty

Just jumping in here to remind people that this information is not just about rich vs. poor. The discussion is framed that way to add context, but the income brackets at the bottom span the entire population of America. The point here is to illustrate what the average family in each of those brackets “gets” from using credit.

Let’s be clear about something. Some super wealthy families carry credit card balances, and pay interest and fees. And some low income families pay their cards in full every single month. All populations fail to pay the balance in full at roughly 30%, actually. But what credit card behavior does to impact your neighborhood, is not something often talked about. This information is meant to help you better grasp that. Thanks for reading, commenting, and debating. Let’s keep the conversation going.

-Kyle
http://www.realscottsdaleliving.com Jon Griffith

Everyone would be better off without borrowing money. It’s not a habit of the rich.
http://www.realscottsdaleliving.com Jon Griffith

I think the inherent problem is the differing opinions between what is rich and what is poor. Contrast our lifestyle against the rest of the world and it puts things into perspective. I’d say let’s not focus on the effect on the neighborhood before we focus the effect on each individual, personally. Borrowing money is a losing strategy, not a winning strategy. Wealth is built by saving money and investing it smartly, using compound interest to our advantage instead of the other way around.
http://www.realscottsdaleliving.com Jon Griffith

I’m hard pressed to conceptualize a “responsible” use of a credit card. It just doesn’t add up mathematically.
Jjtorg

So someone who makes $100,000 a year is rich? Not in the Northeast that’s for sure.

The Author

Help PerkStreet spread the word about how regular families are giving $8.3 Billion to rich families every year. Share this infographic in social media, or embed it in your blog.

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