Older Americans Using Credit Cards for Everyday Expenses

Credit card debt has become a real problem for Americans ages 50 and older. Per a survey conducted by AARP, almost 50% of them pay for basic living expenses using credit.

According to the organization, 47% of people aged 50 and above, who already have credit card balances, are borrowing even more for expenses like food, housing, and healthcare. In the last year, about 17% were forced to use credit cards every month to pay for essentials.

“If you look at the 50 to 64 year olds, the group that is potentially on the runway ramp to retirement, this is the group that is particularly feeling the impact of credit card debt,” AARP senior VP of research, Indira Venkat, told FOX Business.

In the survey, roughly 37% of older Americans with credit card balances noted an increase in debt compared to a year ago. Around 48% admitted to carrying a month-to-month balance of over $5,000, with almost one-third saying they have a balance of $10,000 or more.

Using Credit Cards To Pay for Basics

The high cost of everyday essentials — groceries, housing, utilities, and transportation expenses — are making life financially difficult for older Americans. According to Venkat, many are left with no other option but to utilize credit cards for these basic expenditures.

Yet, the survey revealed it is the cost of healthcare that impacts older Americans the most. Over half of respondents said paying for various medical expenses contributed significantly to their debt balances. The biggest expenses among the group were dental, prescription drugs, and vision care.

Among older Americans over 50, 26% are not sure when they’ll get the debt paid off. Approximately 20% said it will likely take longer than five years.  

Overall, older Americans are deeper in debt than ever before. A LendingTree survey completed in January revealed that the average retirement-age adult has over $11,300 in non-mortgage debt outstanding.

It’s not only older adults with an overwhelming amount of credit card debt. According to an analysis conducted by the Federal Reserve Bank of New York, Americans, in general, are struggling to pay debt, especially credit cards and high-interest car loans.

Speaking to FOX Business, Venkat said there are various tools, like financial calculators, as well as financial advisers that can help create plans to pay off debt. The crucial part is getting started right away.

“Be intentional with a plan on how you’re going to bring down and address the debt. And don’t get discouraged, you know, if there’s a little bit of a setback, we all have that,” she explained. “But the more important thing is to stay on track and keep moving forward.”