DENVER — A new AARP survey sheds light on an alarming trend about the number of older adults using credit cards to cover their basic living expenses.
According to this survey, it’s the most common type of debt carried by adults 50 years and older.
“Among this group, nearly half is using it to pay for basic expenses when they don't have the funds to cover it,” Indira Venkat, AARP’s senior vice president of research, said. “When I say basic, I mean things like food, housing, utilities, healthcare costs. So that's alarming.”
The findings are based on a survey of 4,846 older adults who are carrying over debt from a previous month.
For a closer look at the numbers, 52% of adults between 50 and 64 have credit card debt, with nearly half saying they owe $5,000 or more. The research also found around half said healthcare expenses contributed to their debt, especially dental expenses.
Venkat said this is alarming because of the long-term implications.
“If you take a look at two groups, one the 50 to 64 who seem to be particularly more impacted than others is that they are on the runway to retirement, and they are having to make tough choices,” Venkat said. “You know, do they put away for retirement security, or do they pay down their debt. But even for those who have retired, you know, many of whom are on fixed incomes, it is challenging to pay down the credit card debt, particularly at these higher interest rates.”
Why people end up in this situation varies, but can include everything from losing a job to unforeseen health problems, Venkat said. Studies also show that more than third of the people they surveyed reporting their credit card debt today is larger than it was in the past.
“We know from our study that older adults are carrying that anxiety, of you know, when will they ever be able to pay off the debt? And we know that a healthy mindset is important for healthy longevity,” added Venkat.
However, there are solutions available, like paying more than the minimum payment on your credit card monthly. If you have multiple cards, picking one and really focusing on paying off that one.
Experts suggested also shopping around for credit cards with lower interest rates.
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