GOLDEN VALLEY, Minn.- Credit card debt isn’t just a problem for working families; it is a growing concern among retirees too. Avoiding this pitfall may alleviate a headache during your golden years. With us to discuss is Dan Ament, our KARE11 Financial Advisor with Morgan Stanley.
Average credit card debt for those age 65 and older $6,351 – $6,876 for retirees between 65 and 69. This compares to an average of $5,700 for all U.S. households.
Minimum Payment = Maximum Interest – If you held the avg. credit card balance of $6,351 and made minimum payments with a 15% interest rate, it would take 159 months to pay off your debt (over 13 years) and you would have paid almost $4,200 of interest charges!
Credit card debt cited as one of the top concerns for retirees along with medical related costs (National Council on Aging)
Tackling Your Debt
- Focus on paying down high interest debt first - If you have multiple cards, make minimum payments on lower cost debt and direct the extra cash to higher interest rate debt.
- If you can’t pay down quickly, look for ways to reduce your interest rate – Examples could include a balance transfer to another card with lower rates, tapping a home equity loan or other personal loan.
- Scrutinize your budget – While unpleasant for some, examine your spending and look for ways to reduce expenses to avoid adding to your debt load
SOURCES, RESOURCES & EXCERPTS
CNBC.com – Retirees Carrying Credit Card Debt
Creditcards.com - Minimum Payment Calculator