Five thousand dollars, minus $600: That’s how much credit card debt my friend Ricardo has, now that he has applied his economic stimulus check to his card balances.

Ricardo has been making ends meet with credit during his first 10 years out of college, and he will continue to spend years paying the balance off. His wages haven’t gone up, while the cost of everything else has. And he has zero savings.

Ricardo is in good company.

The credit card crunch underscores the great racial divide that remains in the American economy. Around half of all white households with credit cards are indebted, but for black households the number is more than 80 percent, with Latino families close behind.

Nearly a quarter of credit cardholders of color must set aside more than 40 percent of their income to paying off debt. For whites, that number is only 17 percent.

For every $1 that white American families save, a black or Latino family, on average, is only able to set aside 18 cents. The mortgage meltdown is having a devastating effect all across, but especially for people of color. It might strip as much as $213 billion in assets from black and Latino households, according to a recent study by the nonprofit group United for a Fair Economy.

The average credit card interest rate for low-income households and people of color hovered around 22 percent — more than 10 percentage points higher than the rate paid by high-income whites, according to research by Demos, the nonprofit group I work for. The reality is that credit is costlier for those consumers who are less able to afford it.

Which brings me back to my friend Ricardo. When the costs of gas, food and housing and everything else go up and incomes don’t, where do people turn? Credit. Even as they struggle under other carry-over debt, many families have no choice but to take on more. And the so-called democratization of credit has come with dangerous side effects: outrageous annual percentage rates (APRs), ridiculously high fees, draconian penalties for even slight infractions and, of course, steadily mounting debt.

While we need to increase income, assets and basic safety nets in a way that addresses the current racial gaps, a cure for our financial woes requires fair and enforced regulation of the lending industry’s business practices. It’s on Congress’ agenda, many hearings have been held, and there’s hope good progress can be made. Recently, the Federal Reserve has proposed changes to protect cardholders from unreasonable changes in interest rates and overdraft repayments. It’s all a step in the right direction. Let’s hope candidates for office are getting an earful from strapped households. If you need any talking points, just ask my friend Ricardo.

Jose Garcia is a senior research and policy associate at Demos (demos.org), a national public policy center. He is the author of many reports on debt and race, and is the co-author of the new book “Up to Our Eyeballs: How Shady Lenders and Failed Economic Policies are Drowning Americans In Debt” (The New Press/Demos, April 2008) uptooureyeballs.com. He can be reached at pmproj@progressive.org.