The Dirty Little Secret About Baby Boomer Debt
But here's the fact that convinced me older Americans need more help managing their debt than new college grads: The age range of low- and middle-income Americans with the highest credit-card debt today is 65 and older — they owe an average of $9,283. By comparison, 18- to 24-year olds average just $2,982 in credit card debt; those aged 25 to 34 are about $5,156 in the red.
These findings were disclosed in The Plastic Safety Net, a new report by Demos, a nonpartisan public policy research and advocacy organization in Washington, D.C. The group surveyed 997 low- and middle-income households carrying credit-card debt for three months or more.
Demos also reported that Americans 65 and older had cut their debt the least since 2008 — just 5.5 percent, compared to a 51 percent reduction in plastic debt by 25- to 34-year-olds in the same income bracket.
Causes of Steep Credit Card Debt
What accounts for the punishing credit card bills of seniors?
“The recession and the stock market crash decimated the retirement savings that many older Americans rely on to get by,” says Amy Traub, a senior policy analyst at Demos and the study's co-author. As a result, these financial victims tend to rack up credit card charges to cover monthly expenses.
To compound the trouble, Traub says, many older households have little problem qualifying for new credit, making it easier for them to get additional cards and dig a deeper hole. “Seniors tend to have better credit than younger households," she notes.