Why Grandma Owes More on Her Credit Cards Than You Do

If you thought credit card debt was mostly a young person's problem, think again. In 2012, Americans age 50 and older actually owed more on their credit cards, on average, than younger people in low- and middle-income households carrying credit card debt.

While low- and middle-income Americans under 50 had $6,258 on their cards on average, those 50 and over averaged a whopping $8,278. At an age when many Americans are hoping to achieve a modicum of financial stability, more than a third of those in our survey population age 50+ relied on credit cards at some time in the past year to pay their basic expenses. That's the troubling finding of my new study released today by AARP and Demos. The research, part of the AARP Public Policy Institute's Middle Class Security Project, explores a number of reasons why older Americans find themselves coping with so much credit card debt.

The reality is, credit card debt for nearly all age groups declined between 2008, when we did our last study on credit debt, and 2012. That's because the financial crisis and housing crash caused lenders of all kinds to offer less credit; $211.1 billion in credit card debt was written off as uncollectable; and households hit by the recession made renewed efforts to live frugally and pay down their bills. But we found that credit card debt levels among older Americans declined less than they did for young people. In fact, Americans age 75 and older are the only group in our survey for which credit card debt actually increased over this time period. Why?