Robert F. Kennedy Jr., a prominent nominee for the Health and Human Services secretary under President Trump, recently disclosed carrying up to $1.2 million in credit card debt. This revelation came amidst a backdrop of soaring credit card balances in the United States, which reached a record $1.17 trillion in 2024, indicating that even the wealthy are not immune to financial challenges.
Kennedy’s financial disclosures exposed credit card balances ranging between $610,000 and $1.2 million, with interest rates from 23.24% to 23.49%. Despite his considerable income, experts describe this level of debt as highly unusual. “That’s a truly massive amount of credit card debt,” said Ted Rossman, senior industry analyst at Bankrate. Alongside this, Carolyn McClanahan, a certified financial planner, questioned the necessity of such debt given Kennedy’s high earnings.
The underlying issue resonates with a broader trend where Americans increasingly use credit cards as a financial buffer due to inflation. Matt Schulz, chief credit analyst at LendingTree, noted that inflation has severely limited financial flexibility, causing some to rely on credit cards as an emergency fund. These debts can become burdensome, especially with high interest rates.
For households and individuals like Kennedy, experts suggest focusing on expediting debt repayment to mitigate costs. If Kennedy were to pay $50,000 monthly towards his lower debt estimate, it would take 15 months and approximately $93,000 in interest to clear. However, if his debt is at the higher end, the same monthly payments would extend to 33 months and cost around $434,000 in interest.
Statistics show that the average debt per credit card user stood at $6,380 in late 2024, with an interest rate averaging 20.13%. Therefore, prompt debt reduction is advised to save on interest, providing a reliable, tax-free return as noted by Rossman.
Further insights reveal that wealthier individuals might inadvertently accrue sustained credit card debt due to higher credit limits. Rossman highlighted that almost 60% of those earning over $100,000 have been in credit card debt for at least a year, with 24% in debt for five years or more. This scenario can be exacerbated by the pursuit of credit card perks, such as those from exclusive cards, which might not be the most cost-effective borrowing strategy.
Charlie Douglas, another certified financial planner, advises wealthy individuals to have credit lines ready to avoid liquidating investments and triggering capital gains taxes for significant purchases. He also suggests maintaining up to a year’s worth of expenses in cash as a safety net.
Kennedy’s substantial credit card debt not only sheds light on the financial issues even the affluent face but also serves as a broader reflection of the economic challenges imposed by inflation. Experts advise prioritizing debt repayment to avoid costly interest and maintain financial stability. This approach can benefit not only individuals like Kennedy but also average Americans struggling under similar financial pressures.
