Obama’s Credit Card: Learning From Presidential Plastic (2024)

Sure, he’s the president of the United States. But he’s also a human being and, ultimately, a consumer. He pays his bills each month and his taxes each year. He watches TV, he’s a big sports fan and he always stays stylish.

President Obama, like roughly 160 million other Americans, also has a credit card. That’s right, the president is packing plastic – the JP Morgan Select Card, to be specific.

Obama has an eventful history with credit cards, as a matter of fact, from having his card get declined at an NYC restaurant to his account being repriced as a result of a missed payment. He’s also implemented landmark reform legislation that has dramatically changed the credit card market.

In this guide to presidential plastic, we’ll tell you what you can learn from President Obama’s credit card experiences so that you can follow in the footsteps of 44’s financial achievements while avoiding the repetition of his mistakes.

What Can We Learn From Obama’s Credit Card Choice?

Background Intel: President Obama’s credit card of choice is the JP Morgan Select Card. He was photographed with the card at a Texas barbeque restaurant, where he also reportedly cut the line – earning the disapproval of many on social media.

What We Can Learn: The real, substantive questions that stem from this unique look inside the president’s wallet are: 1) Could Obama have gotten a better card? and 2) What does this card choice indicate about the rest of the president’s personal finances? We’ll address those issues below.

1. Could Obama Have Gotten A Better Credit Card? Yes, he certainly could have. President Obama is actually leaving significant value on the table by using the JP Morgan Select Card. Offers like the Double Cash and Diamond Preferred from Citi could actually save the president hundreds of dollars each year.

2. What Else Can We Infer About The President’s Personal Finances? President Obama makes a bit more than $789,000 per year, according to tax filings, with about $506,000 in net income after taxes. That means he’s allocating roughly 20% of his yearly take-home pay to credit card charges, if he’s actually meeting the Select Card’s $100,000 annual spending benchmark.It is perhaps more likely that President Obama is either not qualifying for anniversary bonuses – rendering his choice of cards even worse – or he was given the card and all accompanying benefits on the house, so to speak. That would certainly reflect poorly on Obama’s image as the new, scrupulous sheriff in the personal finance town.

What Can We Learn From Obama’s Credit Card Getting Declined?

Background Intel: Yes, President Obama’s credit card was declined while dining at the Manhattan restaurant Estela with his wife. “It turned out I guess I don't use it enough. So they thought there was some fraud going on,” Obama recalled in a 2014 speech delivered to the Consumer Financial Protection Bureau. “Fortunately, Michelle had hers. And I was trying to explain to the waitress, no, I really think that I’ve been paying my bills. Even I’m affected by this.”

While the problem thus did not prevent the First Couple from paying, it did mark an embarrassing moment as well as momentary fodder for political pundits, which distracted from the United Nations General Assembly meeting that was the reason for the president’s trip to New York.

For those interested in what the president and first lady dined on at the 4-Yelp-star beverage-driven restaurant featuring American food with European influences, a photo of the couple’s appetizer order was posted online. They had burrata with salsa verde and charred bread as well as an endive salad with walnuts and anchovies.

What We Can Learn: This incident is about far more than voyeurism. It’s actually chalk full of learning opportunities, as we’ll lay out below.

• Credit Cards Get Declined For Many Reasons: From card reader errors and expired plastic to over-limit accounts and suspicious charges, credit cards are rejected for far more reasons than simply not having paid your bill. In President Obama’s case, the transaction appeared suspicious because it interrupted an extended period of account dormancy and perhaps because it was outside of the president’s normal geographic spending area.

• Ask For The Declined Code To Learn More: Given the myriad potential causes of a declined credit card, it’s important to ask the merchant to read you the error provided by his or her card reader. This information may also be on the receipt printed for the declined transaction.

• Call Your Issuer To Prevent Future Interruptions: Once you get to a quiet place, give your issuer a call to confirm the reason for your account problems. You can then determine what it will take to restore spending power.

To learn more about why credit cards are declined and how to handle such a situation, check out our guide on Declined Credit Cards.

What Can We Learn From Obama Paying A Penalty Rate?

Background Intel: While little record of this exists, our sources indicate that before he was president, Obama fell victim to some of the same predatory credit card industry practices that he later struck down via the CARD Act. More specifically, Obama allegedly missed a payment on a credit card account and the issuer reacted by jacking up his interest rate.

What We Can Learn: Perhaps one moral of this story is that if you become president, you can use the Legislative Branch to shape laws based on your experiences. Arbitrary interest rate repricing such as Obama endured is no longer legal for consumer credit card accounts. Small business owners, on the other hand, have been left to fend for themselves. Credit card issuers can increase rates on existing debt held on business-branded cards whenever they want, rather than having to wait until the cardholder becomes 60 days delinquent – as is the case with consumer cards.

We therefore recommend using a small business credit card primarily to earn company-specific rewards on everyday expenses that you can pay off in full each month. You can then use a general-consumer credit card, preferably one with an extended 0% introductory rate and no annual fee, for all financing needs. This is one example of The Island Approach.

Obama’s Credit Card Laws

Overseeing the country’s recovery from the Great Recession and the financial crisis that caused it, President Obama signed into law a number of important financial industry reforms. One of the most expansive and significant examples of this was the enactment of the Credit Card Accountability Responsibility and Disclosure Act of 2009, otherwise referred to as the CARD Act.

This law implemented a consumer bill of rights and prohibited many of the unsavory practices permeating the consumer market prior to the downfalls, such as arbitrary interest rate increases, universal default and out-of-whack fees. Studies have shown that the act has reduced the overall cost of credit as well as certain fees.

To learn more about the CARD Act, check out our in-depth guide on the law.

Ask The Experts: Is President Obama A Good Financial Role Model?

• What can people learn from the way that President Obama has managed his own personal finances?
• Where does President Obama rank among the all-time pantheon of personal finance market reformers?
• What personal finance-related measures would you like President Obama to accomplish before he leaves office?

Images: Joseph Sohm / Shutterstock.com and Toonstyle.com / Shutterstock.com

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