WASHINGTON—Many older Americans are finding themselves with a financial problem often associated with younger generations—credit card debt.
According to AARP, credit card debt is now the most common type of debt held by adults aged 50 and over.
“And what’s causing the older generations to go into debt? Everyday expenses,” said AARP in releasing its findings. “Whether they feel financially secure or financially insecure, these types of purchases – followed by vehicle expenses, home expenses and health care – heavily contribute to the credit card debt shouldered by older consumers.”
The Findings
- 47% used a credit card to pay for basic expenses when their cash flow fell short.
- 48% carry a balance of $5,000 or more in credit card debt.
- 50% have credit card debt from health care expenses.
- Older consumers – whether financially secure or not – also generally don’t know what happens to credit card debt after the cardholder dies.
- Only 28% of respondents chose the right answer, and the remaining 72% either chose an incorrect answer or stated they didn’t know what happened after a cardholder died.
- What’s more is that even while older consumers are working to pay off their debt, 71% have not looked for resources on how to reduce it, AARP said. “The options listed by AARP included conducting an internet search, searching through social media, consulting a family member, credit card company, financial app, financial professional, friend or bank,” the organization said. “Given that half of consumers struggle with financial literacy, this is unfortunately not a big surprise.”
