Too many older Americans are using credit cards to cover groceries and rent: AARP

An alarming share of older adults use credit cards to cover basic living expenses, AARP reports in a new survey.

The findings illustrate how the rising costs of food, housing, health care and other expenses threaten the financial health and retirement security of older Americans, according to the advocacy group.

“The kitchen-table economics of food, utilities, health care, all of those things are chipping away at individuals’ abilities to pay down debt,” said Indira Venkat, AARP senior vice president of research.

According to AARP data, 52% of adults ages 50 to 64 have credit card debt, along with 42% of those ages 65 to 74.

The survey covered 4,846 older adults who reported carrying credit card debt. Of that group:

• 47% said they use credit cards to pay for basic living expenses that they could not otherwise afford.

• 48% said they owe $5,000 or more, and 28% carry a balance of $10,000 or more.

• 50% said health-care expenses had contributed to their card debt, especially dental expenses.

Credit card debt is concerning for Americans who are approaching retirement. “They have to make hard choices: Do they pay down debt, or do they save money for retirement?” Venkat said.

For someone who has already retired, credit card debt can cause even more trouble, because retirees generally live on a fixed income. For that group, Venkat said, “it’s a real challenge to pay down debt without significant trade-offs.”

The AARP survey adds to a growing stack of reports that show older Americans dealing with credit card debt.

A January report from the personal finance site LendingTree found that 97% of retirement-age adults have non-mortgage debt. The average balance: $11,349.

Credit card debt was the most common type among seniors, the analysis found, with 93% carrying a balance. The study drew from credit reports for seniors ages 66 to 71 in the 50 largest American cities.

More than two-thirds of retirees with debt carry balances on their credit cards, according to the 2024 Spending in Retirement survey from the nonprofit Employee Benefit Research Institute. The analysis found retirees were more likely to have credit card debt than other kinds.

The share of older Americans with debt has risen over the decades. Among people 75 and older, 53% of households reported debt in the 2022 Federal Reserve's Survey of Consumer Finances, up from 21% in 1989.

Here are a few tips, from AARP and other sources, on how to retire your credit card debt.

If you’re determined to pay down your card balance, experts say, get aggressive. The minimum payment, calculated by the card company, typically covers only the interest due and 1% of the balance, said Ted Rossman, senior industry analyst at the personal finance site Bankrate.

To make a real dent, experts say, stop making new charges on the card. Then, bump up your payments. Consider a monthly sum equal to 5% of your gross income. Alternately, make double the minimum payment in the first month. Then, pay the same dollar amount in the months that follow, as the balance falls.

If you have more than one credit card, experts say, pick one and get serious about paying it off. Start with the card that carries the highest interest rate, or the one with the smallest balance.

If you pick the card with the smallest balance, you can pay it off quickly, score a psychological victory and “take that item off your spreadsheet,” Venkat said.

If you choose to focus on the card with the highest interest, you will pay less interest over time, saving yourself a lot of money.

While the average credit card interest rate now tops 20%, it’s still possible to sign up for a card that accrues no interest at all for a period of 15, 18 or 21 months.

The zero-APR credit card can be a powerful tool for paying down debt, experts say, because you pay no interest over the months of the promotion.

Be careful, though: Once the promotion ends, the card company will charge interest on any remaining balance.

Another way to pay off a credit card balance more quickly is to persuade the card company to lower your interest rate. The average credit-card interest rate is about 24%, Investopedia reports.

“You can reach out to your credit card provider and try to negotiate,” Venkat said. The issuer may reward you with a lower rate.

This article originally appeared on USA TODAY: Older Americans use credit cards to cover basic living expenses: AARP