Credit woes prompted Lee Sanchez to tear up all but one of his credit cards.
By Rebecca Sheir
While the U.S. economy begins to recover, nearly half of the nation's Latinos carry credit-card debt. A recent study by a Hispanic advocacy group in D.C. suggests more Latinos are using plastic to make ends meet.
Lee Sanchez of Silver Spring, Maryland, recently threw out all of his credit cards, except one.
"I have one for an emergency," he says. "But the ones that really got me in trouble, you know, you do the bending thing about 30 times, they get really hot, then you rip it in half and throw it away!"
When the 31-year-old sold his house, he and his wife burned through the cash improving their new home. Then Sanchez was out of work for a month, and they charged up a storm. They're still paying off the balances two years later.
"More Latino families have been getting credit cards, which is a great thing," says Janis Bowdler of the National Council of La Raza. She authored the study, "Survival Spending: The Role of Credit Cards in Hispanic Households."
"But," she adds, "if they have anything unexpected, most families' budgets are not equipped to handle that."
Bowdler says more and more Latinos are using plastic for everyday expenses. She also says Latinos are more likely to get ensnared by sub-prime cards, with their high rates and fees.
But building good credit is key. So she actually advises against Sanchez's bending-and-ripping solution, and suggests the using-your-card-more-prudently method instead.