11 July 2010

Seniors' Credit Card Debt Rising

Many seniors now owe thousands of dollars on several credit cards. Many are trying to help their families in these difficult economic times. Late fees and higher interest rates are pushing the amount owed up. Their debt has grown but their income has not. As mentioned in a 10/17/09 post, Social Security benefits will not increase in 2010. Increases are based on the Cost of living Allowance (COLA). As the government seems, this stayed static for 2009.

Older Americans are carrying debt loads they can barely handle on their fixed incomes. Homes are devalued and many are turning to "reverse mortgages". In 2007, more that 40% of seniors' income was used towards paying down their debts. This was 12.5% higher than any other age group. Those 65 to 74 years of age (11.2%) are contributing a large portion of their money to credit card debt reduction.

Research has shown that on an average, $4,000 of a senior' s credit card debt is towards medical expenses (prescription drugs, dental and doctor visits).

With the "baby boomers" retiring and the projected insolvency of Medicare in 2017, retirees are not feeling comfortable.

source: The Washington Post