How Seniors Can Pay Off Credit Card Debt

How Seniors Get into Debt

For millions of older adults, rising credit card debt is a major source of stress. The mounting costs of housing, utilities, and food add to the burden, leading to larger credit card balances. In fact, in 2024, the average credit card debt for Baby Boomers (ages 58-77) was $6,648.

Relying on credit cards to cover financial gaps can be a challenge when it's time to make monthly payments. For many older adults on a fixed income, Social Security is their primary source of income. With an average Social Security benefit of $1,864.87 per month, many senior citizens struggle to afford basic needs. 

Without retirement savings, vulnerable senior citizens often face frequent budget shortfalls, and some struggle with complex health issues or disabilities that lead to high balances.

A pension shortfall also forces some seniors to rely on credit cards for daily expenses, making repayment difficult. With the average credit card interest rate at 24%, senior credit card debt is getting more expensive.

The Impact of Credit Card Debt on Seniors

Credit card debt can have a significant impact on the well-being of older adults. The stress of managing expenses while paying off debt can also take a toll on their physical health.

With limited retirement savings, many feel helpless as their balance grows and they may miss payments. This can lower credit scores and impact their ability to borrow. If debts are sent to a collection agency, seniors could face constant calls from debt collectors.

In some cases, overwhelming credit card debt, in addition to medical and other sources of debt, may lead seniors to file for Chapter 7 bankruptcy or Chapter 13 bankruptcy.

Thankfully, there are options for seniors to get help paying off credit card debt. Read on to learn more.

5 Options To Pay Off Credit Card Debt As a Senior

Although it may seem overwhelming, it's possible for seniors to pay off credit card debt through careful budgeting, a feasible payment plan, and debt relief measures. Here are some practical steps seniors can take:

1. Create a Budget and Prioritize Payments

Creating a budget is the first crucial step in tackling credit card debt as a senior. A budget will help you see where you’re spending money, which allows you to reduce spending in some areas.

A budget will also help you determine how much money you can pay towards debt each month so you can create a repayment plan. Once you have a clear picture of your financial situation, prioritize payments based on interest rates or total balance.

Paying off credit cards with the highest interest rates first to minimize interest charges is called the debt avalanche method. Or, you can use the debt snowball approach to pay off the credit cards with the smallest balance to start knocking out debts quickly. 

2. Explore Debt Consolidation

Debt consolidation doesn’t eliminate your balances, but it allows you to combine multiple debts, such as personal loans and credit card balances, into a single loan. It can help make your debt easier to manage, reduce your monthly payments, and help you secure a lower interest rate if you have good credit.

A debt consolidation loan can help you pay off multiple credit card balances at once. You may secure a lower interest rate compared to what you’re paying on credit cards, helping you pay off your debt faster.

Another option is a balance transfer credit card, which can be beneficial if you have excellent credit and can qualify for a 0% APR. If you can pay off your balance during the 0% APR promotional period, 100% of your payments will go toward your principal, not interest.

3. Consider Debt Settlement

Debt settlement allows you to work with credit card companies to make a lump sum payment toward your debt for less than what you owe. Consider partnering with a debt relief company to negotiate on your behalf.

This debt relief strategy can help you save as much as 50% on your total debt (before fees) if you’re working with a debt settlement company and are willing to offer a lump sum payment.

Teresa Dodson, debt expert and founder of Greenbacks Consulting, believes debt settlement can be an effective option for senior consumers. “Most seniors, depending on their financial situation, just need to worry about housing, food, and medical bills. If they become unable to afford paying credit card bills and have trouble keeping up with the basic necessities, debt settlement is a great option,” Dodson shares.

If you’re six months past due on your credit cards and struggling to keep up with debt payments, settling your debt can be an effective strategy to rescue your finances.

4. Look for Government Assistance Programs for Seniors

While you can’t get direct government help with credit card debt, you may qualify for senior assistance programs that can reduce your living expenses. This can free up money in your budget that you can use to pay off seniors’ credit card debt.

For example, you may qualify for a food allowance, SNAP benefits, or grocery stimulus, allowing you to reduce your grocery expenses. You may also meet the requirements for Medicare programs, which can bring down your healthcare expenses.

5. Get Help From Nonprofit Organizations

You can also get ongoing financial help through nonprofit credit counseling agencies and organizations like Financial Empowerment Centers. Look for an FEC center in your area to receive free financial counseling.

Qualified counselors can help review your budget, prioritize your financial obligations, and assist you in paying off your debts. This can be a helpful first step in tackling credit card debt.  

How To Avoid Credit Card Debt as a Senior

While it’s possible to pay off credit card balances even as an older adult, it’s ideal to avoid it in the first place. We recommend following these tips to prevent debt from accumulating.

Plan Your Budget

Budgeting is the key to avoiding debt and practicing good financial management habits. Create a budget each month to have a clear picture of your income and expenses. This will allow you to identify areas where you can reduce expenses.

When money is tight, budgeting is even more important. It may help you avoid relying on credit cards to pay for things you may not need.

Build an Emergency Fund

Unexpected medical bills and emergencies are a leading cause of many seniors falling into the credit card debt trap. Setting up an emergency fund can help you avoid relying on credit cards to pay for things like car repairs, unexpected medical bills, or other expenses.

Seek Financial Advice

Getting financial advice from a professional like a credit counselor can be a great way to create a tangible plan to achieve your financial goals. Whether you want to ensure you have enough saved for a comfortable retirement or want to learn how to manage your debt better, sometimes it's best to seek professional help instead of trying to do it on your own.

Manage Your Credit Card Debt as a Senior

Once you make a plan to pay down credit card debt, it's important to avoid racking up the balance again. If you’re struggling to afford daily necessities like groceries, utilities, or medicine, take advantage of government benefits for seniors.

Credit card debt isn’t the end of the world—seniors with credit card debt can access a wealth of resources, tools, and programs available that can reduce their financial burdens.

End Senior Credit Card Debt with TurboDebt®

If you're a senior citizen struggling with overwhelming credit card debt, you don't have to manage alone. Our team of professionals at TurboDebt® can help you make a plan to pay off unsecured debt from credit cards, personal loans, or medical bills.

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Contact the experts at TurboDebt today to get started with a free consultation. Now is the time to start living your best financial life!