“We have created access to a card where the default behavior would be to help people with too much debt get out of debt and stay out of debt.”

Many Americans are swamped with credit card debt. It is a leading source of debt in U.S. households, right after home, car and student loan debt. And credit card debt continues to increase. It now totals more than $850 billion, an increase of $172 billion since 2000, according to the Center for Responsible Lending.

This is not because more Americans are going outon frivolous shopping sprees. In fact, the datasuggest that a significant number of low and middle-income Americans are relying on their credit cards just to make ends meet. Data from the Center suggest 40 percent of low and middle-income households use credit cards for basic expenses like rent and food and nearly 50 percent use credit cards for medical expenses. More than 85 percent of the unemployed have racked up credit card debt.

Conversely, credit card companies are doing quite well. A 2012 Federal Reserve report says that banks in the credit card market had net earnings of 5.4 percent, compared with a 1.2 percent rate of return for all commercial banks. Part of this is because of predatory and in some cases unfair and deceptive lending practices by those companies that Congress took some steps to curb in 2009.

 Justine ZinkinBut not all credit card issuers exist for the sole purpose of reaping profits. “We are committed to providing better financial products and services for the working poor,” said Justine Zinkin, CEO of Neighborhood Trust Financial Partners, a financial services and financial counseling nonprofit. Over the years, Neighborhood Trust has helped 30,000 lower income people improve their financial lives. “One of the biggest economic challenges for low-income individuals and families is burdensome credit card debt,” Zinkin said. “Once you are in debt, it’s hard to get out.”
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