Posted on 19 February 2013
By Mark Miller
Most Americans have been working to shed credit card debt in the wake of the Great Recession – with one exception: older people.
Research by Demos and the AARP Public Policy Institute shows that older Americans took on greater amounts of credit card debt during the Great Recession, while younger households have been shedding it. From 2007 to 2010, credit card debt for households over age 75 jumped 31.5 percent. Although the average balance was just $1,276, that figure compares with negligible credit card debt for this age group in 1989.
“The fact that households over age 75 are showing the fastest growth in credit card debt is really frightening,” says Debra Whitman, executive vice president for policy and international at AARP.
It’s not that seniors are running up credit card tabs on frivolous items. Rather, necessities are the key culprits – especially medical expenses. So, the credit card problem is a symptom of a broader issue: the rising number of older households operating without a safety net. And it’s more difficult for seniors living on a fixed income to rid themselves of debt, since most don’t have the option of going to work to boost income.
My Reuters colleague Chris Taylor has more on this in his column today.