Cultural question related to credit?

Question

It seems that black people have terrible credit (in general). All of my black friends have credit scores in the 600's or lower. All my asian and white friends are above 700, usually 750's (except a few). Why does it seem that black people tend to neglect credit, and never repay back? is this seen as an opportunity to fast cash, without foreseeing the disaster and havoc it may wreak upon their credits?

Is it just a cultural thing, that black people percieve themselves as deprived, and therefore take advantage of $500 credit offers, only to mess up their score? Do all young black kids have to life as ghetto superstars? If your black, this is not to offend you, but im merely stating the general trends that I see. Answers from blacks, preferably young are wanted. Thanks

katzchen75 sorry for the generalization and offending you, BUT its not generalizing directly - im questioning the trends I see in the different ethnicities. Almost everyone except for blacks seem to do fine. I dont mean black people as a whole, but statistically speaking, 72% of black people will neglect their credit, whereas 28% of asians will, and 32% of whites will. That means an average of 30% of WHITES AND ASIANS will neglect their credit (almost 1 in 3) where as 72% (more than 2 out of 3) black will neglect it.

These numbers are from a study conducted at UCLA's school of business. You can goto their library and find the reference materials there.

Answer 1

Most really poor blacks that I know, don’t have credit cards but may be behind in other payments such as rent, utilities, medical bills and such, all which can send one’s credit score into the toilet. The ones that I know that have credit cards have all experiences a period of temporary unemployment that seen their credit score into the toilet.

It’s like this, if one was not raised and taught about financial issues, one may not have the knowledge of how to handle finances and prosper. Generally speaking, you have two types of black folk; the ones, who though experience, learned from someone else the art of handling finances and the ones who did not. It is a generational thing.

Black people want the American dream like everyone else. America is consumer’s culture that constantly markets to use, not to sacrifice but to buy now. They have convinced some people that it is a good idea to use one the cash back credit cards as a way to save money. I’ve heard some black say that it’s a good idea without giving thought to the debt, high interest rates and how much they would be loosing.

To me, I think that the Al Sharpton’s and the Jesse Jackson’s of the world need to be speaking more about financial responsibility and wise money matters with the black community because I think that one of the biggest things standing in the way of prosperity is poor financial decisions.

For me, my mom told me not to sign up for the free credit card offers at college. She always had us save; she always used coupons and shopped only when there was a sale. Her thing was this: she was poor and didn’t want to be any more. She did what she had to do financially and escaped poverty.

Today, I’m a big fan of Dave Ramsey, http://www.daveramsey.com/ and his radical approach to finances. He believes that everything from cars to second homes, should be paid for with cash. I started out listening to Suze Orman, http://www.suzeorman.com/ because she has a wealth of financial information in her books. The key thing her is that I took control of my finances by seeking out knowledge and using it; a thing that is lacking with many.

Answer 2

The credit scores are irrelevant. They prey on black people, poor people, college kids, anyone that might slip up and ruin their score, which somehow we all "have: before we even have a credit card. It's just a system to make companies more money through late fees, over-limit fees and inflated interest rates. A contrived way to make more money by granting "mercy" credit on those with low "scores" via a larger rate. An elaborate psuedo-legitimate legal usury.

Answer 3

I'll try to avoid generalizations myself. I do think many people with credit problems lack a proper understanding on finances and credit. A lack of appreciation for the importance of these issues may be more common among certain backgrounds. (I happen to think it is.)

Answer 4

Wow, I am white and this offends me. Way to make generalizations about people.