Too many older Americans are using credit cards to cover groceries and rent: AARP

An alarming stock of older adults usage recognition cards to screen basal surviving expenses, AARP reports successful a caller survey.

The findings exemplify however the rising costs of food, housing, wellness attraction and different expenses endanger the fiscal wellness and status information of older Americans, according to the advocacy group.

“The kitchen-table economics of food, utilities, wellness care, each of those things are chipping distant astatine individuals’ abilities to wage down debt,” said Indira Venkat, AARP elder vice president of research.

According to AARP data, 52% of adults ages 50 to 64 person recognition paper debt, on with 42% of those ages 65 to 74.

The survey covered 4,846 older adults who reported carrying recognition paper debt. Of that group:

• 47% said they usage recognition cards to wage for basal surviving expenses that they could not different afford.

• 48% said they beryllium $5,000 oregon more, and 28% transportation a equilibrium of $10,000 oregon more.

• 50% said health-care expenses had contributed to their paper debt, particularly dental expenses.

Credit paper indebtedness is concerning for Americans who are approaching retirement. “They person to marque hard choices: Do they wage down debt, oregon bash they prevention wealth for retirement?” Venkat said.

For idiosyncratic who has already retired, recognition paper indebtedness tin origin adjacent much trouble, due to the fact that retirees mostly unrecorded connected a fixed income. For that group, Venkat said, “it’s a existent situation to wage down indebtedness without important trade-offs.”

The AARP survey adds to a increasing stack of reports that amusement older Americans dealing with recognition paper debt.

A January study from the idiosyncratic concern tract LendingTree recovered that 97% of retirement-age adults person non-mortgage debt. The mean balance: $11,349.

Credit paper indebtedness was the astir communal benignant among seniors, the investigation found, with 93% carrying a balance. The survey drew from recognition reports for seniors ages 66 to 71 successful the 50 largest American cities.

More than two-thirds of retirees with indebtedness transportation balances connected their recognition cards, according to the 2024 Spending successful Retirement survey from the nonprofit Employee Benefit Research Institute. The investigation recovered retirees were much apt to person recognition paper indebtedness than different kinds.

The stock of older Americans with indebtedness has risen implicit the decades. Among radical 75 and older, 53% of households reported indebtedness successful the 2022 Federal Reserve's Survey of Consumer Finances, up from 21% successful 1989.

Here are a fewer tips, from AARP and different sources, connected however to discontinue your recognition paper debt.

If you’re determined to wage down your paper balance, experts say, get aggressive. The minimum payment, calculated by the paper company, typically covers lone the involvement owed and 1% of the balance, said Ted Rossman, elder manufacture expert astatine the idiosyncratic concern tract Bankrate.

To marque a existent dent, experts say, halt making caller charges connected the card. Then, bump up your payments. Consider a monthly sum adjacent to 5% of your gross income. Alternately, marque treble the minimum outgo successful the archetypal month. Then, wage the aforesaid dollar magnitude successful the months that follow, arsenic the equilibrium falls.

If you person much than 1 recognition card, experts say, prime 1 and get superior astir paying it off. Start with the paper that carries the highest involvement rate, oregon the 1 with the smallest balance.

If you prime the paper with the smallest balance, you tin wage it disconnected quickly, people a intelligence triumph and “take that point disconnected your spreadsheet,” Venkat said.

If you take to absorption connected the paper with the highest interest, you volition wage little involvement implicit time, redeeming yourself a batch of money.

While the mean recognition paper involvement complaint present tops 20%, it’s inactive imaginable to motion up for a paper that accrues nary involvement astatine each for a play of 15, 18 oregon 21 months.

The zero-APR recognition paper tin beryllium a almighty instrumentality for paying down debt, experts say, due to the fact that you wage nary involvement implicit the months of the promotion.

Be careful, though: Once the promotion ends, the paper institution volition complaint involvement connected immoderate remaining balance.

Another mode to wage disconnected a recognition paper equilibrium much rapidly is to transportation the paper institution to little your involvement rate. The mean credit-card involvement complaint is astir 24%, Investopedia reports.

“You tin scope retired to your recognition paper supplier and effort to negotiate,” Venkat said. The issuer whitethorn reward you with a little rate.

This nonfiction primitively appeared connected USA TODAY: Older Americans usage recognition cards to screen basal surviving expenses: AARP