Christian Debt Recovery

Average Credit Card Debt By State

June 14th, 2010 |

Author: Gavin

Elderly Fall In Pit Of Credit Card Debt

Elderly Fall In Pit Of Credit Card Debt

Thousands of cash strapped elderly Americans are building up credit card debt far quicker than other consumers amid the harsh reality of dwindling retirement portfolios and rises in medical costs, according to a recent study.

The study, which has been conducted by Demos, a liberal public policy group, has shown that low and middle income consumers of the age 65 and older carry an average of $10,235 in credit card debt. These figures have grown by 26 percent since 2005. Credit card debt has risen by an average of 3 percent for all borrowers to $9,827 since 2005.

The Federal Reserve states that overall, revolving debt, particularly credit card debt, grew during much of 2008. However, as many consumers pared spending, outstanding debt also fell. The last quarter of 2008 and through the first quarter of 2009 we have seen overall debt slide 2.3 percent to $939.6 billion.

There are now thousands of consumers who are turning to credit cards for necessities instead of luxuries, according to the Demos overview, which also shows that more than 50 percent of households state that medical expenses have contributed to their growing credit card debt.

“The frivolous spending idea is not what’s driving families into insane amounts of debt,” says Jose Garcia, a Demos associate director. “The expenses that most affect families are the costs of living.”

The Demos’ telephone survey, conducted April through August 2008, polled a total of 1,205 low- and middle-income households. These households were defined as those with 50 percent to 120 percent of the local median income. The margin of error is believed to be 3.7 percent, plus or minus a small amount.

The results are dead in-line with other field research, showing that senior citizens are extremely rapidly becoming the face of a debt ridden country.

According to the Employee Benefit Research Institute (EBRI), a non-partisan group that studies economic security, elderly Americans’ credit card debt grew at a much faster rate than the general population between the years of 1992 and 2007.

“You can see a large increase in credit card debt for elderly people right near retirement age,” says Craig Copeland, a senior research associate at the EBRI. “They’re probably still working, but they are also more likely to become disabled,” which is a circumstance that could make them to rely heavily on credit cards.

Also, the survey conducted by Demos discovered that those who carry credit card debt are also paying more for it. Almost one in four households are now paying an interest rate greater than 20 percent. On top of that, households that were charged a late fee paid four fees during a twelve month period on average.

It is these extremely high interest rates and fees that can upend consumers’ budgets, advocates assert. Sally Hurme of the AARP, the group for consumers 50 and older told, “When your interest rate goes up, it is another hard blow to your ability to make ends meet.”

About the Author

Tina is a credit repair forum expert with over 10 years of experience helping people with personal finances. For additional information and a free credit repair forum visit http://www.creditforumonline.com .

The Student Loan Scam: The Most Oppressive Debt in U.S. History – and How We Can Fight Back

$16.88

Alan Collinge never imagined he would become a student loan justice activist. He planned to land a solid job after college, repay his student loan debt, and then simply forget the loans ever existed. Like millions of Americans, however, in spite of working hard, Collinge fell behind on payments and entered a labyrinthine student loan nightmare.High school graduates can no longer put themselves thr…