What to Do About Credit Card Debt for Older People

A 2009 study by public policy group Demos found that the elderly --- those age 65 and older --- accumulated credit card debt faster than any other demographic between 2005 and 2008, according to "USA Today." The elderly sometimes have credit card problems because they tend to live off of a fixed income and don't work. The best option may be to legally discharge this debt.

Expert Insight

Ultimately, the elderly need to pay debts that give them the essentials to live, such as a mortgage and utilities, according to Legal Counsel for the Elderly. Cathleen Moran of Moran Law Group suggests bankruptcy as a possible option when the elderly can't make credit card payments. Credit card debt is unsecured debt and can be eliminated during a bankruptcy.

Considerations

Bankruptcy reform in 2005 made it harder to file for bankruptcy. Consider helping seniors save money on their largest expenses. Drug companies, pharmacies and government programs such as Medicare can help reduce the cost of prescription drugs by 20 percent, according to CBS News. With rising home values comes larger property tax bills, so states often offer to reduce tax bills for the elderly.

Contacting the Creditor

An elderly individual with credit card debt problems is also likely paying more in interest than the average holder: Credit card rates are higher for people with lower credit scores and missed payments. He should contact his creditor about freezing or lowering interest rates, according to Legal Counsel for the Elderly. If the individual can't even make the minimum payment, he should consider negotiating a lower debt. Usually, creditors would rather collect less than what a borrower owes to avoid legal fees.

Tip

The elderly often have little cash but they may have paid-off mortgages. Reverse mortgages are available to people age 62 and older. In a reverse mortgage, the homeowner converts equity in the home into an interest-free loan that doesn't need to be repaid until the owner sells the home or dies.

Once the elder person in your life gets control of credit card debt, advise them to avoid credit cards with high interest in the future. (ref 4)