Close to 50% of Older Americans Depend on Credit Cards for Basic Living Expenses

Almost half of U.S. adults aged 50 and older who have credit card debt use credit cards to pay for basic living expenses they don’t have the money to cover, according to an AARP survey released March 10. Another 17% of surveyed seniors said they relied on credit cards to cover basic expenses every month in 2024.

“A concerning number of older adults carry credit card debt today just to make ends meet,” said Indira Venkat, AARP Senior Vice President of Research. 

The rising costs of basic expenses like food, housing, and utilities, along with health care expenses and unexpected financial burdens, are threatening financial well-being and retirement security for many older Americans, according to the study. 

The survey found that nearly 1 in 4 older adults with credit card debt (37%) said they have more credit card debt now than they did a year ago. Nearly half (48%) of older adults who carry a credit card balance from month to month owe $5,000 or more, and 28% carry a balance of $10,000 or more.

People approaching retirement age — those between 50 and 64 years old — are especially feeling the impact of credit card debt, said Venkat. That group is having to choose between paying down their credit card debt or saving money toward retirement. “They are making tough choices,” Venkat said.

About half of older Americans in the survey who carry credit card debt said they feel financially insecure. They are also more likely to have lower incomes, higher credit card balances, and have seen those balances increase over the past year, according to the survey. 

Almost 9 in 10 respondents (87%) blamed unplanned expenses for their credit card debt. But everyday expenses, including maintaining a vehicle, covering housing costs, and spending for health care, were the most common sources of credit card debt.

The share of active credit card accounts making just the minimum payment hit a 12-year high in January, according to the Federal Reserve Bank of Philadelphia. And the share of delinquent balances continues to worsen year over year after surpassing pre-pandemic levels in third quarter 2023. 

Older Americans Using Credit Cards Out of Necessity

Most people expect to reach a financially comfortable retirement, and that scenario is possible with careful and early planning. But retirees today outspend their annual incomes by more than $4,000, according to the Bureau of Labor Statistics. 

“Credit card debt can jeopardize retirement security. For many retirees, who often live on a fixed income, it’s a real challenge to pay down debt without significant trade-offs,” said Venkat with AARP.

Workers 65 and older are a growing segment of the workforce, and the percentage of people in that age group who work full time continues to increase, according to the Bureau of Labor Statistics. 

For retirees on fixed incomes, credit card debt is a major stressor, said Jessica Johnston, Senior Director for the Center of Economic Well-Being at the National Council on Aging. 

“When you’re charging things you can’t live without because your monthly expenses are higher than your income, it’s incredibly difficult to pay down those balances,” said Johnston. 

This trend highlights the need for remedial financial intervention to help consumers regain stability before their debt spirals out of control. 

Communicating with credit card companies as early as possible when faced with financial difficulties can help older cardholders get a handle on excessive debt. Some states have laws that protect IRA benefits and independent retirement accounts so a senior’s income is protected.

Nonprofit credit counseling agencies operating under the auspices of the National Foundation for Credit Counseling can help consumers address these issues through personalized guidance and structured debt management programs. 

“Most retirees aren’t using their charge cards for frivolous purchases,” Johnston said. “They’re using them out of necessity.”