July 27, 2009
-
Senior Credit Card Crisis, Pt.1
Growth Exceeds Younger Age Groups.We all imagine how wonderful it will be when we retire. You work hard for some 40 plus years, save for a relaxing life of retirement, and maybe get in a cruise or two. Unfortunately, in today's economy, seniors have frightfully watched as their retirement funds have dwindled while Wall Street fat cats get fatter and fatter. Cost of living has escalated to heights where seniors fixed incomes aren't sufficient to make ends meet. We all have watched as our home values sink further and further to unacceptable levels and in many cases far below the original purchase price making home equity loans unobtainable. For many, the only alternative has been the increased dependence on credit cards. At a time when seniors should be financially secure, they are facing the same credit card crisis that has taken over the lives of most lower and middle income America families. Credit cards have kept them alive and yet threaten to destroy a lifelong dream.
A recent study conducted by Demos found that seniors' credit card use has increased greater than any other category. Demos is a liberal group who call themselves a "think-tank" that provides ideas on power and politics to empower individuals to "shape their own lives." The study polled over 1,200 middle and lower income families. Results from the study indicated that seniors 65 years and older are carrying a credit card balance average of $10,235; an increase of 26% from the average in 2005. This number is striking in itself but comparing it to the overall debt increase of 3% brings seniors to a crisis of catastrophic proportions.
The numbers are glum to say the least. More than any other time, seniors have an obligation to seek out the best options available that will meet their daily and future needs. Groups like the AARP organization and The National Consumer Law Center have been around for years and offer sound financial advice and services. Meanwhile, if you must depend on using your credit card to meet your needs, read part 2 for what you need to watch out for when shopping for a new card.