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Obama reveals his own credit card woes

Daniel Ray

President Obama, sometimes criticized for an excess of coolness, had something close to an “I feel your pain” moment Friday — and that pain was caused in no small part by his personal credit card use.

The moment came as he announced he had appointed Elizabeth Warren as a special Treasury adviser, a role in which she will shepherd into existence a new federal consumer watchdog agency. (See Connie Prater’s blog from Thursday that anticipated Warren’s appointment.)

Treasury Secretary Timothy Geithner and President Obama welcome Elizabeth WarrenI could have used that watchdog myself early in my career, the president told those attending the Rose Garden ceremony at the White House.

Before talking about his personal credit card woes, he gave mortgage lenders, banks and credit card issuers a sharp stick in the eye.

“Part of what led to the financial crisis were practices that took advantage of consumers,” Obama said, “particularly when too many homeowners were deceived into taking out mortgages on their homes they couldn’t afford. But we also know that these practices predated the crisis and these practices don’t just exist in the housing market.

“For years, banks and mortgage lenders and credit card companies have often used fine print and confusing language and attractive front-end offers to take advantage of American consumers. We’ve seen banks charge unreasonable overdraft fees, we’ve seen credit card companies hit folks with unfair rate hikes, we’ve seen mortgage lenders offer cheap initial monthly payments and interest rates that later skyrocketed.

“All this has cost middle-class families billions of dollars — tens of billions of dollars that they could have used to pay their bills, to pay their mortgage or send their kids to college.”

Then he got personal.

“And I have to say, when Michelle and I were first starting a family, that we had to navigate a lot of these financial decisions, whether it was buying a first home or paying off our college loans or putting a lot of debt on credit cards. Obviously we were a lot better off than a lot of families, but we still often found ourselves confused or finding ourselves in tough situations as a consequence.

“So we’ve got a pretty good idea — I personally have a good idea — of how this can be difficult and sometimes confusing for the average consumer.”

Watch the full video on C-Span, or read a transcript of Obama’s statement.

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  • mike

    so mister obama you are admitting to be financially stupid and irresponsible like the other dummies? that is a real confidence booster in you,,lol

  • Richard

    Hey Mike
    I see President Obama’s statement totally different. He showed candor and openness admitting that he was also fallible to the credit card and mortgage lenders abuses and legalese used to confuse and deceive average Joe Six-pack.

  • william owens jr

    By and large it seems a whole generation or more is ignorant (non taught) about the use of credit in any form and not to be trusted with anything other than a debit card where excess is immediately recognized and dealt with.
    “Honest rules” should be developed, published and taught in primary grades and on educational channels of TV for adults as well.
    Get rid of credit cards.
    Use only debit cards.
    Cross check “every loan” including Mortgages for compliance with accepted criteria.
    Curtail bundled derivative trading.where the contents contain non verifiable material.

  • Mike

    That may be the case, but it doesn’t seem like he’s learned much from his early episode with debt considering what he’s doing to our national debt.

  • Wendy Bailey

    Ditto mike…I can’t believe how much debt the US gov is is…they are practically insolvent…

  • “Before talking about his personal credit card woes, he gave mortgage lenders, banks and credit card issuers a sharp stick in the eye.”
    This says it all… I find it interesting that the govt pressures these institutions in the public eye, but I am willing to bet behind closed doors there is a different tone…

  • I think his comments made him more human. Who hasn’t made a mistake of some kind with their finances over the years. It has happened to all of us because this stuff is complicated. The good thing is that we learn from those missteps.

  • Mark

    Blame everyone else for personal finance mismanagement. Ok, so Obama admitted that he mismanaged his finances. Nice. However, the VAST majority of people manage their money just fine. It is not rocket science to realize that when you borrow from someone, you have to pay it back… with interest. So, if you agree to borrowing at 11.99%, then you should know how compound interest works, and how repayment is calculated. It’s not hard! Especially for two IVY league graduates with multiple degrees!!!!