Nearly half (47%) of older adults with credit card debt say they rely on plastic to pay for basic living expenses they cannot otherwise afford, according to the results of a survey released yesterday by AARP that sheds fresh light on credit card usage among Americans aged 50 and older — a picture that is worrisome. Even more unsettling: 17% admit they’ve done this every month over the past year. Rising costs of essentials such as food, housing, and utilities are squeezing older Americans’ budgets, putting their financial well-being and retirement security at risk.
Why it matters: For professionals in debt collection agencies, debt buying companies, fintechs, banks, credit unions, and consumer finance firms, these findings underscore a growing vulnerability among older borrowers. Many live on fixed incomes, making it difficult to pay off high-interest balances without compromising everyday needs — or even essential services. Understanding these trends is crucial for crafting responsible strategies that address delinquency risks and potential defaults.
By the numbers:
- Debt accumulation: Thirty-seven percent of respondents have more credit card debt now than a year ago.
- High balances: Close to half (48%) of those carrying month-to-month balances owe at least $5,000. More than a quarter (28%) owe $10,000 or more.
- Unexpected hits: Almost 9 in 10 (87%) cite unforeseen expenses as a contributing factor to their debt.
- Demographics: Adults ages 50–64 are the most likely to carry credit card balances (52%), followed by those 65–74 (42%), and 75+ (35%).
What they’re saying: “A concerning number of older adults carry credit card debt today just to make ends meet,” said Indira Venkat, AARP Senior Vice President of Research. “Credit card debt can jeopardize retirement security. For many retirees, who often live on a fixed income, it’s a real challenge to pay down debt without significant trade-offs.”
The bottom line:
