Seniors racking up credit card debt
Health care costs are part of the problem
Here's a statistic that should give us all pause: The average credit card debt of seniors grew by 26% between 2005 and 2008, CreditCards.com reports. For the rest of us, the increase was a comparatively modest 3%.
Also, CreditCards.com says: "According to a study (.pdf file) released in July 2009 by New York City-based Demos, a public policy group, consumers 65 and older carried $10,235 in average card debt last year." That is a lot.
And that's very troubling, considering that so many retirees are living on Social Security and no other savings, and face considerable medical expenses despite government-run Medicare. The dreaded "doughnut hole" is just a drop in the bucket compared with the other potential health care-related demands on their money.
What's happening here?
The CreditCards.com post gives few clues but offers lots of solutions -- and they're good ones. We figure several factors are at work.
- Many older folks are stretched thin. That's true in better times, but now, because retirement savings for lots of people have shrunk, they're turning to credit in a pinch. (Our partner site ConsumerAffairs.com pointed out that many older people are now delaying retirement big time.) For some real-life stories, and this is from August 2007, read "Is Grandpa drowning in debt?"
- Medical expenses are a burden. The Demos study says, "Older households, those 65 and over, reported the highest amount of credit card debt due to medical expenses: $3,988."
- They're victimized. Consider how vulnerable people who didn't grow up in the computer age are to phishing and other forms of identity theft. Scammers love seniors. And then there's all the "free" stuff that's advertised as a way for unscrupulous companies to start billing your credit card.
What to do? Be on the lookout for signs that seniors you know are struggling. Yes, this is difficult. If you don't have a close relationship that allows discussion of such things, you're going to have to be very observant.
- Are your parents suddenly living beyond their means?
- Are their bills piling up on the kitchen table -- unopened?
- Are they using a credit card to purchase things they used to pay for with cash, like groceries?
How to proceed? If you can have a frank, respectful discussion, do so. If the topic would be unwelcome, enlist help from other family members or friends, CreditCards.com suggests.
For more help, read "How to handle Mom and Dad's finances."
- How to get rid of your folks' stuff
- Will you end up supporting your parents?
- Help seniors hang up on telemarketing scams
Published Sept. 18, 2009
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