The new report comes from AARP and it shows that Americans age 50 and older are carrying more credit card debt on average than younger people, a reversal of findings from a similar survey just five years ago.
“Credit card debt, too often portrayed as a problem of irresponsible young people who get carried away at the mall, must now be recognized as a serious issue for people age 50+,” says the report.
AARP’s Public Policy Institute collaborated with Dēmos to produce the report based on a survey by GfK Knowledge Networks in February–March 2012 that covered 997 households that had carried credit card debt for three months or more.
Here are some of the significant findings:
- Forty-nine percent of Americans age 50+ report that car repairs contributed to their credit card debt, and 38 percent report that home repairs contributed;
- Thirty-four percent of Americans age 50+ use credit cards to pay for basic living expenses such as rent or mortgage payments, groceries, utilities, or insurance because they do not have enough money in their checking or savings accounts;
- Nearly one-quarter of people age 50+ say that job loss contributed to their credit card debt; 15 percent report that it was the single biggest contributor;
- Eighteen percent of people age 50 to 64—people who are nearing retirement—report that they drew on retirement funds to pay off credit card debt;
- Older Americans are more likely to take on credit card debt in an effort to assist other family members: About 23 percent of people age 50+ report that money given to, or used to pay the debts of relatives added to the balance on their credit cards, compared to just 11 percent of those under age 50.
One of the conclusions is that Baby Boomers and other older Americans aren’t being irresponsible.
“This report suggests that credit card debt among older Americans is primarily a reflection of difficult economic times, not a lack of personal financial responsibility,” the report said.
The report casts a dire tone on this indebtedness and how it might affect the future of the ever-aging, ever-graying Baby Boomers.
“The overall picture is one of precariousness, of a population often turning to a high-interest ‘plastic safety net’ during difficult times. This instability has troubling implications for the retirement security of older Americans who carry credit card debt,” it said.
“Indeed, older Americans report that in order to pay off their credit card debt and deal with unexpected expenses, they dug into their savings - including retirement funds that they might soon need to live on. Some older households decided they had to forgo medical care, and others declared bankruptcy.”
(Attached to this article is a video on managing credit card debt.)