Credit Card Debt Can Weigh on Senior Citizens

Gone are the days when senior citizens avoided debt at all costs. Nowadays, credit card debt and other debt is a fact of life for many Americans enjoying their golden years. According to a recent National Consumer Law Center report, the average credit card debt for consumers between 65 and 69 now totals almost $6,000. The report states that nearly one-third of retirees describe credit card debt as a "hardship."

The are a number of reasons why senior citizens may suffer from credit card debt. Many seniors have simply adapted to a lifestyle of owing interest on their credit cards, homes, and cars.

But for too many older Americans, the problem of credit card debt stems from simply having too little savings going into retirement. Living on a fixed income, these seniors end up putting expenses on their credit cards as costs rise each year.

Medical expenses are one of the main costs that many seniors deal with. Rising medical bills force retirees to pay for prescriptions and doctor bills with a credit card.

Although older consumers still have less debt than their younger counterparts, their debt is catching up and the danger is greater. Seniors with only a few years left to work or who are already retired may find it difficult to apply credit card debt solutions that rely on increasing income or tapping assets.

Still, there are ways for the elderly to combat credit card debt. First, older consumers need to understand how just one financial misstep can result in a cycle of late fees and higher interest rates. Seniors can take action by educating themselves, starting by reading the Schumer Box provided with each credit card application that includes information such as the card's default Annual Percentage Rate, credit limit, and late fee. Websites like CreditCardXPO.com make it easy to research various credit card options. Also, seniors may want to sit in on financial workshops for their age group held by many public school districts and other local non-profit groups.

Also, create a plan before you retire. Get help creating your plan from a fee-only financial planner, who you pay by the hour, or get the financial planner to approve the plan you create on your own. Your plan will determine factors such as the age at which you can retire. It also must contain a budget for living within your means, allowing you to figure out how much discretionary income you will be left with after paying for expenses.

But be sure to expect the unexpected when it comes to golden years expenses. Costs such as health care are often unknown until later in life, which can make life on a fixed income difficult. You will want to plan as best you can for such costs, as you may have to put them on a credit card.

Separately, older Americans should consider delaying social security for as long as possible. Credit card debt and other debt is largely due to seniors' growing expenses yet fixed incomes. By delaying the start of Social Security for as long as they can, seniors will get an increased monthly payment when they do begin the program. This delay may need to be combined with working for a few more years wherein not only are assets not withdrawn, but they grow even more.

While senior credit card debt is a problem now, it is only expected to increase when high-spending baby boomers begin to retire. For those nearing retirement age and for those already there, consider getting a lower APR through use of a low interest credit card.