Older adults have fixed incomes, and extra expenditure can quickly pile up. We present a few tips for older adults to avoid debt when using a credit card
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The median income of households with older adults in America was around $47,357 in 2019. The average annual expenditure for older adults in 2014 was $48,885. Clearly, there is a gap in income vs. expenditures.
Many times, this gap is getting filled up with credit card debt. When our seniors reach the retirement age, we need to be very careful that they do not get trapped in this debt cycle because it can be very dangerous.
We believe that financial management can be hard for older adults, and thus, it is okay for their children to intervene and look if they are struggling.
Mostly, it is the issues related to debt payment when using a credit card that worry our aging parents and loved ones – this is where your role comes up. You can continually educate them about avoiding/managing such debts, and this article’s tips can contribute positively.
Are Credit Cards Bad for Older Adults?
Americans hold the dubious record of carrying about $4.2 trillion credit card debt (December 2019). As per our calculation, that makes an average of $6,194 credit card debt per person!
Additionally, credit card holders have to worry about delayed financial plans and interest payments. Our elderly often struggle with their budget and limit their credit card spendings simply because it is tough to keep up with the seemingly ‘positive reasons’ to keep a credit card.
We cannot argue about the importance and need of holding a credit card, but the debt that arises from its overuse can undoubtedly be avoided.
Signs That You Must Talk to Your Parents About Their Credit Card Debt
Your parents or elderly loved ones will rarely ask for your help regarding their financial issues because it is what it is, even though it isn’t the case in every household. It is best to confront them with your concerns and how you plan to help them.
So, how will your parents need help with their credit card debt? Look for these signs, and you will come to terms with them.
Balances Piling Up
At an old age, the stress related to financial worries can be seen on more senior people’s faces. When you see them being worried about phone calls, emails, and the bills keep coming without any payment insight, it is a sign.
Late Payments
You might catch him stuffing bills and payment mail under the bed or in the most unused corner of the cupboard. Well, closing our eyes towards the trouble is certainly not the answer, especially at old age. So, when you notice them avoiding bills like this, it is time for some confrontation.
Avoiding Discussion
It always starts with, “Don’t worry, we will manage,” without eye contact. They can also be confused about working credit cards or signing up for the process, etc. Asking these questions repeatedly will make it worse because they might feel that you are intruding on their private life and trying to control their expenditures
It is essential to look for these signs and clear things because older adults with credit cards might also be exposed to fraudulent activities.
Tips for the Elderly To Avoid Credit Card Debt
Once you are through the part where they accept that they are avoiding their credit card debt for any reason, you can go ahead and tell them about all the ways they can avoid credit card debt. We have managed to gather some essential tips for your perusal and further help your aging loved ones.
Try to buy what you (they) can afford.
Most people fail to follow this tip and thus, lose themselves in the trap of months and months of debt, including our elderly. While our minds get tempted to buy all the things we cannot afford, it is good to try and contact only those things we can afford.
However, once in a while, it should be okay to buy something expensive that we have been eyeing on for a while. Remind your parents and older folks about the same!
Pay the entire balance by the end of every month.
It might seem like a task but trust us when we tell you that it reduces stress and will work brilliantly for your elders. Start with a zero balance each month and avoid carrying it forward – the best way to avoid debts in the future.
You will need to have a strong mind and staunch discipline for the first few months to follow this method, and your parents will thank you after a while.
Understand the credit card terms
Even if young people do not spend time reading and learning about credit card terms, then how can we expect older adults to understand the same?
Understanding how the interest will be applied, the fee you will be charged with, and other debt-related issues are clearly laid down in the terms, and thus, it will help you and your loved ones avoid credit cards more because you will know exactly how much it costs you.
Try getting just one credit card.
The more cards you or your parents have, the more there will be chances for you all to get indebted. Even if people have solid control over their minds and temptations, they still give in to the illusion of buying more with their cards. It is a simple tip with a complex implementation.
Have emergency savings and safety nets
When you do not have an emergency fund, insurance, or savings account, you will have no other way but to resort to your credit card.
In case of an unforeseeable emergency, like medication, car repair, an unexpected bill, etc., you should have a backup savings account, or there would be no other way but pay a debt for your credit card bills. The same goes for your parents and other older adults.
Should an Adult Child Intervene if Older Adults Are Swarmed With Credit Card Issues?
It is almost impossible to live without a credit card in the current world. However, there are ways for your parents and older people to avoid the debt that comes with it.
While you cannot spend all your time teaching your parents about the importance of preventing deficits on your credit cards, you can share these tips with them and prepare them for the future. So, plan a visit, meet them, and let them know how you feel.
