Nearly 40 percent of retired Americans have accumulated significant credit card debt in the last few years, and most aren't worried about ever having to pay it off, according to a report from USA Today. The reason for this could be the current generation of seniors was raised in a time when it was frowned upon to talk about money, and as a result, they may be too embarrassed by their financial difficulties to discuss them with anyone.
"Talking about money to the important people in your life forces you to come clean about the life you are living and … the way you manage your money," Katie Dunsworth, who is part of a group that teaches financially troubled consumers how to take control of their money, told the newspaper.
More than half of seniors have saved less than $50,000, and many say they haven't put away anything, but stopped working anyway, the report said. Only a small percentage delayed their retirement due to existing debt.
As a result of these problems, when a debt-laden senior passes away, their families can go from worrying about who gets their house to selling the property as a means of covering their surviving credit card debt, the report said. Typically, whatever the parent owes is deducted from their estate prior to it being divided among their various beneficiaries.
One of the biggest mistakes a senior citizen can make with their credit card debt is to make a late payment, because that will typically trigger the activation of penalty rates that can climb as high as 30 percent, the report said. This can be particularly problematic because many elderly people live on a fixed income, and the issue will likely just compound itself as they remain unable to pay their mounting bills.
In some cases, it may be beneficial for a senior to seek the help of a debt settlement agency, which can help them reduce their total overall balances while also cutting down the amount they have to pay.