Credit card debt is a problem for anyone. For many senior citizens, the weight is often too much to carry, and they do not know where to turn for help.
Many seniors live on a fixed income, so meeting day-to-day expenses is about all they can handle. Any unexpected cost, such as a medical bill, can force them to “pay with plastic.”
How bad is credit card debt among senior citizens?
The financial pressure on seniors is worsening. A 2018 report found:
- 42% of households headed by people 65 to 74 had credit card debt in 2016, a 10% increase from 1992. The median debt rose from $1,174 to $2,500.
- 26% of households headed by people 75 and older had credit card debt, a 6% increase. The median was up from $838 to $2,100, the highest ever.
In the meantime, the average monthly Social Security check is about $1,413. Social Security accounts for 90% of the income for 21% of married seniors and 44% of singles.
How can senior citizens manage their credit card debt?
First, of course, seniors should avoid using credit cards as much as possible. But there may be times when circumstances are beyond their control.
One strategy is to save money by paying off the card with the highest interest rate first. Depending on the situation, though, paying off the card with the lowest debt makes the most sense.
Whatever happens, do not miss payments or make late payments, which worsens the problem. Many credit card companies will work with their cash-strapped customers to lower payments.
The budgets of many senior citizens leave little margin for error. Careful debt-relief planning can make all the difference.
How can senior citizens secure their future?
Using credit cards to pay for emergency expenses is a lifetime habit for many people. It is not a major problem when they have a steady income.
When they are on a fixed income, the bills are harder to pay. The task is not impossible if they apply some financial common sense.