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How Credit Card Debt Affects Seniors

Credit card debt poses staggering challenges for people of all ages, but it can be particularly problematic for seniors. Do you feel like you’re drowning in debt and can’t see a way out? Here are some valuable resources where you can receive help.

Fixed Incomes Can Contribute to Credit Card Debt

If you’re on a fixed income, you may have turned to credit cards to finance extras or unexpected expenses. But when that bill comes in the mail, you may be horrified to discover you don’t have enough to pay it off. Then you incur late fees and growing interest rates, which only adds to your overall debt.

If you’re in this situation, don’t panic. Take the time to budget your monthly expenses. By doing this, you’ll discover where most of your money goes, and you’ll be able to come up with a plan to cut back. If you can’t do it on your own, talk to a financial advisor, family member or friend who’s knowledgeable about budgeting and finance. They may even help you find extra money to spend on a special treat for yourself, without breaking the bank.

Credit Card Debt Is on the Rise for Seniors

Debt among seniors has increased eighty-three percent over the past decade.

One of the best ways to decrease your debt is to pay off those high-interest credit cards. Don’t let these companies take advantage of you.  Know your spending limits and stick to them, regardless of the freedom credit card spending seems to offer. This is some of the hardest debt to pay off.

Free Help May Be Available

If you don’t have family members or a financial advisor to turn to for help, many financial institutions offer free credit counseling that can help you understand what you owe, as well as assist you in developing reasonable plans to repay credit card debts at a doable rate.

Seniors Can Negotiate Lower Interest Rates

It is possible to negotiate lower interest rates for your credit cards. Though it’s not an easy process, it could offer more effective debt relief than riskier options like taking out a home equity line of credit or applying for a reverse mortgage. Research what your credit card company has to offer for seniors.

Also check out nonprofit credit counseling agencies.

You can choose to work with a counselor to resolve your financial problems on your own, or you can enter into a debt management plan, where you can consolidate your credit card payments and get interest rates reduced.

It’s possible to pay off your credit card debt in three to five years, and once you’ve completed your obligation, you’ll be debt free and improve your credit score.

While you’re in a debt management plan, your credit card issuers won’t report you as delinquent, as long as you pay on time.

Though a nonprofit credit-counseling agency will charge debt management fees, experts say the cost is minimal in comparison with trying to pay off the debt on your own.

But beware! Do your homework. Check the agency out on the Better Business Bureau website. Also find out if they carry industry accreditation. And as a final step, make sure there are no complaints filed against them with your state attorney general’s office.

The counseling services should be no cost, except for debt management fees. There are many for-profit companies that pose as credit counseling services. If they promise to erase bad credit, create a new credit identity, or even remove bankruptcies, judgments or liens from credit files, it’s a scam and should be avoided.

No matter what type of debt-related issues you’re dealing with, it’s always helpful to know you aren’t alone.

Join Super Senior Connection to share your stories and chat with like-minded seniors.

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