With the deterioration of personal savings, many elderly Americans are accumulating debt at an alarming rate. In fact, many consumers age 65 and older are using their high-interest credit cards to pay for basic living expenses such as rent, utilities and food. Some older homeowners have used home equity to consolidate their debt. An average of $14,000 in debt consolidation was reported in a recent study. These elderly consumers need solutions to maintain their quality of life and many of their children are struggling to find answers.
Discover the Root Cause
As elderly consumers ring up large debt, the knee-jerk reaction, especially for their children or those close to them, is to help. Watching a parent struggle to make ends meet or seeing a huge credit card bill that might threaten an estate or your parents' quality of life is difficult to see. You can help the elderly or your elderly parents with small purchases. You can offer to buy groceries or pay a month's rent but that doesn't get to the heart of the problem. Find out what has caused the credit card debt. Does the elderly person know how much is owed? Have they been a victim of a telemarketer, solicitor or other unscrupulous person? Or have they just spent too much and now they are in a bind? The elderly need your help and your respect, but they also need a plan.
Monitor Credit Card Usage
Paying with credit cards can become a lifetime habit that some folks just can't break. For some, it is a necessity based on a shortage caused by shrinking savings, medical bills and unexpected rising expenses. High credit card debt can also lead to more offers from credit card companies and debt consolidation firms. If you are over the age of 65 or have a parent that age, make sure to stick with a low interest card with fair terms. Do not have more than one card and make sure to limit purchases on that card, if possible. Keep a budget and begin a plan to pay off as much debt as is reasonable.
Use Your Local Resources
The elderly are often proud, and many do not want to ask for help. If credit card bills have become too much or if cash is low, elderly consumers have other options than to keep feeding the credit card system. Senior centers, government agencies and churches can offer financial relief by providing meals, assistance on prescription drugs and perhaps subsidizing some bills. If your parent is in such a situation, offer to help fill out paperwork and work through the system.
The Bottom Line
The bottom line is elder consumers need to control their spending with credit cards closely and wisely. Live within your means if you are in retirement and don't spend foolishly. If you have a parent who is struggling with debt, counsel them and seek help. Understand that debt might outlive the elderly, but they should not be bullied into paying credit card bills over basic living expenses.
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