Judge Brett Kavanaugh’s Very Questionable Financial Judgment

Within the last 24 hours, there has been a lot of analysis of required financial disclosures around Judge Kavanaugh’s appointment to the Supreme Court.

It is clear that Judge Kavanaugh, together with his wife, has a positive net worth of over $1 million between the equity in their Chevy Chase home, their retirement accounts and their savings accounts. I personally believe that this is a fair net worth estimate for a Federal Judge who has never worked in private practice.

What I find difficult to fathom is that these same disclosures revealed that he held credit card debt between $15,000 and $50,000 on each of three credit cards at some point in 2017. In other words, Judge Kavanaugh, at some point in time, held no less than $45,000 in credit card debt and probably much more. Even if that debt was just transactional – in order to buy Washington Nationals tickets for his friends – it should have been paid off immediately and it was obviously carried for some length of time in order to require federal reporting.

Anyone who reads their credit card disclosures (anyone with a pulse) knows that the rate on credit card debt can easily be above 16%. Those who are well versed in the law, as is Judge Kavanaugh, will know that such debt easily get as high as 36% without violating most States’ usury laws, and as outlined in the Credit Card Act of 2009 or Marquette National Bank versus First Omaha Corp.

To be clear, credit cards should be used as a financial instrument to generate rewards, particularly travel rewards, and balances should always be paid off by the payment date.

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But individuals or couples with a positive net worth of $1 million, especially those who own a home, should not be carrying credit card debt on their credit cards. Instead, they should look at home equity loans, home equity lines of credit, auto loans or even personal loans for the liquidity required to avoid even a single interest payment at a rate which anyone of sound financial judgment would easily determine to be absurd.