5 Debt Traps Seniors Fall Into Credit Card Debt (and 5 Ways To Pay It Off)

If you’ve retired, unexpected expenses might push you into credit card debt. Here are 5 tips to help you recover from credit card delinquency.

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Updated May 28, 2024
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According to data from the Federal Reserve, the average amount of credit card debt adults take on declines decade over decade from middle age onward — that is until they reach age 65. 

From there, the average American’s credit card debt starts to climb, leaving those 75 and older with around $8,080 of consumer debt.

Wondering why seniors’ credit card delinquency escalates and what you can do to minimize the odds of it happening to you? Keep reading. We’ll talk through some of the most common reasons seniors accrue credit card debt and offer suggestions to help you minimize debt as you age.

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No. 1: Medical debt

Goran/Adobe Worried senior couple feeling stressed while paying their bills over Internet while sitting on the table at home.

The exact amount of money retirees spend on medical expenses can vary dramatically depending on individual health and wellness, which makes budgeting for medical costs in retirement extremely challenging. 

Generally speaking, though, a retired married couple will spend more than $11,000 a year out of pocket on medical expenses. That number doesn’t necessarily reflect the high cost of end-of-life care or long-term care facility stays.

Since medical expenses can be hard to predict, it’s no wonder many retired Americans don’t have enough money on hand to pay for unexpected costs, leading many to cover the shortfall with credit cards.

No. 2: Fixed incomes

WavebreakmediaMicro/Adobe senior women holding a shopping list while his husband is carrying a shopping cart  in background during their shopping in a super store.

It’s hard enough to keep up with expenses when you have a steady source of income. But once you’re retired and are living on a set amount of money each month, it can be much harder to free up money in your budget to cope with sudden massive expenses.

When you don’t have cash on hand, it’s tempting to cover costs with credit cards — and it’s sometimes necessary, too, especially when the alternative is losing your housing or being unable to afford groceries.

However, unless you pay back your debt immediately, your monthly payments will escalate as interest accrues. And if your fixed income isn’t enough to cover your current expenses, it likely won’t be able to accommodate your future credit card payment either.

No. 3: Inflation

Halfpoint/Adobe Stressed senior couple calculate expenses or planning budget together while sitting on the table with documents and laptop at home.

Due to inflation, the amount of money you saved in the past might not go as far in the future. While inflation rates don’t typically leap as much as they did in 2021 and 2022, they do tend to increase year over year. 

Social Security benefits usually increase each year in an attempt to keep pace with inflation, but most likely they won’t keep up with the real cost of living.

Depending on inflation, then, your spending power as a senior might be much lower than you’d anticipated when you started saving, which can lead to taking on credit card debt.

No. 4: Avoiding regular maintenance

deagreez/Adobe exhausted and depressed grey-haired man driving car in traffic jam touching nose feeling bad.

According to the National Council on Aging, almost a quarter of all seniors report putting off routine maintenance, either around the house or on their vehicles. 

Of course, seniors aren’t the only demographic to avoid maintenance, especially since smaller fixes have upfront costs that can be hard to budget for.

However, avoiding small repairs and basic maintenance now can lead to bigger, more expensive problems in the future. 

Worse, failing to keep your home or car in good shape can increase the odds of tripping and falling, the most common reason seniors end up with injuries, which lead in turn to sudden out-of-pocket medical costs.

No. 5: Cost of living

fizkes/Adobe Elder couple tied with relocation, packing and unpacking cardboard boxes, sitting on floor of new home

While you were working, you might have fantasized about retiring to your dream location and moving away from the place you’ve lived your whole life. But for better or worse, cost of living differs widely between states and even cities within the same state.

You might think you’re downsizing into a more affordable home, but depending on where you move, your costs could actually go up much faster than you’d planned.

Pro tip: As the cost of living continues to rise, it's important to evaluate your financial fitness and how prepared you are to weather the potential storms that may come in the future. 

Solution 1: Consider a part-time job

Oliver/Adobe Thoughtful senior female standing at her shop is smiling at camera

In today’s world, there are more opportunities than ever to find a flexible part-time job. Whether you drive with Uber or start your own tutoring business, increasing your cash flow can ensure you have enough money on hand to cope with the unexpected rather than turning to credit cards.

If you already have credit card debt, a side hustle can help you find the pocket money to pay your bills as they come due.

Solution 2: Revisit your budget

PRPicturesProduction/Adobe Senior asian man calculating on calculator while sitting in living room sofa using laptop computer and paper indoor

How long has it been since you seriously re-evaluated your budget? If you’re finding it hard to pay for what you need, sit down with your bank and credit card statements from the past few months.

Try to figure out where your money is going. For the most part, are you making necessary expenses? Or are you throwing away money on unused subscriptions or unnecessarily high utility bills?

Decide if cutting back in certain areas will be enough to help you cover your bills and avoid future debt. Then, once you create your budget, stick to it as much as possible.

Solution 3: Look into senior-specific benefits

NDABCREATIVITY/Adobe Fit senior couple holding dumbbells during workout at gym.

Costs can go up as you age, especially for things like medical care, but you may be eligible for more discounts and benefits as you age.

For instance, your local community center might offer free admission to fitness classes for seniors, or your favorite restaurant might serve seniors at a hugely discounted price. Going out of your way to find senior discounts is one solid way to spend less and save more.

Solution 4: Find out if you qualify for SNAP

NDABCREATIVITY/Adobe Happy senior couple holding baskets of fresh fruits and vegitables after purchasing from shop.

Many seniors qualify for food assistance via the Supplemental Nutrition Assistance Program, or SNAP. 

This federal program helps low-income adults — including seniors on a fixed budget — access nutritious food at affordable prices.

Solution 5: Talk to your credit card company about a custom repayment plan

K Abrahams/peopleimages.com/Adobe Senior man on a phone call with finance documents and laptop and paperwork checking finances,doing payments.

If you’re struggling to keep up with payments, consider calling up your credit card company to discuss your situation. 

You’ll want to lay out your income and expenses and explain how much you can afford to pay. You should be prepared to hear a firm “Sorry, but no.”

Not every credit card company will work with its customers to set up custom repayment plans, but yours might, and you won’t find out unless you ask.

Bottom line

bernardbodo/Adobe senior couple adding more amount in the budget they previously made due to increasing inflation rate.

If you’re living on a fixed income, issues like unexpected medical bills and unpredictable inflation can wreak havoc on your savings. 

If you’ve had to add to credit card debt to make up the difference, you’re certainly not alone. You also aren’t doomed to carry around your credit card debt forever.

Instead, whether you’re still working toward retirement or have hit that milestone already, you can use the steps above to find clever ways to pay off debt and avoid accruing it in the future.

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Author Details

Michelle Smith

Michelle Smith has spent a decade writing for and about small businesses. She specializes in all things finance and has written for publications like G2 and SmallBizDaily. When she's not writing for work at her desk, you can usually find her writing for pleasure near large bodies of water.