Flooded with medical costs out of pocket, Valerie Towe and her husband Paul saw that their debt burden began to swell last year.
Faced with the constant account of the chronic obstructive pulmonary disease of the 77-year-old Paul, rheumatoid arthritis and neuropathy, Valerie started touching credit cards to continue to be up to date.
“I was unable to put an end to the end,” Valerie, 65, told Yahoo Finance.
The cost of weekly foods added the stress – almost doubled last year, she said. And finally, while her concern for increasing, Valerie switched to work with abbreviated working hours.
“When you are a guardian, you can’t do a full -time job,” she said.
Worst of this, as everyone knows who have overturned over a credit card from month to month, is a ballooning debt that occurs when you can only pay the minimum amount of Salda on credit cards indicated by interest rates exceeding 20%.
That’s all Valerie managed to do, and the result is a debt with a loan card that is thrown on the gut that approached $ 30,000, she said.
Nearly half of adults 50 and more years carrying credit cards for a long credit card to pay basic life expenses, according to a new AARP report. And about 3 of the 10 older adults with a long credit card are more than a year ago.
More softening: almost half of them owe $ 5,000 or more, and 28% carries a balance of $ 10,000 or more.
This has serious consequences for pension savings.
“Many older Americans with a debt on a credit card that hope will be withdrawn will have to make a difficult decision whether to pay a debt or save for retirement,” said Indira Venkat, a senior research in AARP, for Yahoo Finance. “For those who have already withdrawn and live on a fixed income, it can be a challenge and pay off the credit card and put an end to the end.”
Read more: Best ways to repay a debt credit card
He’s right on that. When people say why they complain the most after they retreat, Biggie is retreat.
Year 2024. Nearly 7 of the 10 pensioners with a long reported to have debt on credit card, by a survey From the Institute for Research of Employee Compensation (EBRA). It’s from 4 to 10 years ago.
While growing costs of foods, housing and vehicles are a side -by -product of adhesive inflation, one of the biggest curves of debt on the credit card is medical costs out of the pocket, such as prescription drugs, with which they are dragged. Receive teeth and vision, Venkat said.
When they could bring an hour back, almost a quarter of a pensioner says that they would prioritize a credit card and other debts before they got out of the workforce, the new one states Investment Report in Faithfulness.
The appearance of debt on the credit card for older Americans is not fading soon. About 1 out of 5 expects it to take more than five years, according to AARP report.
The decision to pay debt or retirement savings is reality for many older Americans because they are close to retirement. More than half of those currently working says that their debt interferes with their ability to save, and recent report determined by Transamerica Center for Retirement Studies.
And it is worrying that the debt has pushed them to take advantage of the existing pension savings. One of the 3 workers took a loan, early withdrawal or difficulty with their 401 (K) or a similar plan or IRA, by transacreamer.
Among those who took a loan or withdrawn from their 401 (K) or similar plan, the most commonly quoted reasons are medical accounts and debt repayment on the credit card.
Multiple evidence: Last year, withdrawal of difficulties increased over 2023, with 4.8% of participants retiring savings, according to 3.6%, according to Vanguard Group, which manages 401 (K) -TIPE for almost 5 million people.
When you withdraw from the traditional 401 (K) account, you slap with income tax payment, and usually 10% of the penalty if you are under 59 1⁄2.
Read more: What is the age of retirement for social insurance, 401 (K) and the withdrawal of IRA -e?
Here’s a simple first step: Call the credit card issuer and ask for a lower interest rate, emphasizing the truth-you are a history history on time.
If your provider will not move, buy a 0%transfer card. You can transfer your high -high credit card cost to a new card with a 0% promotional rate that lasted as much as 21 months. There are, however, 3% -5% of the transmission fee of the total amount you transfer, but that long period of time will give you some space to start paying the balance.
Automation of monthly payments and payment more than a minimum ticket is to reject your debts.
There are several strategies to consider to reduce your total debt. The avalanche method includes debt repayment with the highest interest rate. Other people opt for the snowball method, which first focuses on smaller debts. I’m in an avalanche at school, but whatever suits you best.
Alternatives also include consolidation of all debt of your credit card with personal loan. It is possible that the interest rate in seven years is lower than about 7% if you have a strong credit ability, which is unfortunately not the case if you have collected too long.
Do you have a question about retirement? Personal finances? Anything related to your career? Click here to drop the Kerry Hannon Note.
If you have more balances on a few tickets and the condition of the state transfer or a personal loan will not cover the overall debt, I recommend that you first resolve the highest annual interest rate while paying in the rest to constantly lower interest costs.
A non -profit credit counselor may also be able to negotiate with credit card publishers to give you a break on the rates, but you will pay a service fee. The Ministry of Justice’s website provides List Approved Credit Counseling Agency.
Read more: Best Credit Card to Transfer Salda 2025
Other resources include AARP Calculator for Payment Credit Card AND National Credit Counseling Foundation.
It is easier than done, I know. As Valerie said to me, “I got stuck. I don’t know what to do … more. I’m somehow in the tin with that.”
Kerry Hannon is an older columnist at Yahoo Finance. She is a strategist of career and retirement and author of 14 books, including “”In control at 50+: How to succeed in the new world of work ” and “never too old to get rich.” Follow her further Bluesky.
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