Miss Daisy has retired in the red. When she adds up her monthly bills for her mortgage, car loan, electricity, gas, water and phone, they...

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DALLAS — Miss Daisy has retired in the red.

When she adds up her monthly bills for her mortgage, car loan, electricity, gas, water and phone, they exceed her income from Social Security and a part-time job by almost $200.

“I rely on my credit cards to make ends meet,” said the Dallas woman, 65, who asked that her last name not be used. “I have no savings, so I have no choice.”

She owes more than $7,000 on three cards.

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Seniors who grew up in frugal times and have usually been reluctant to go too far into debt are turning increasingly to credit cards to make do in retirement, says a study by the National Consumer Law Center (NCLC).

“Older people have generally held less credit-card debt than younger consumers, but their generation is catching up,” said Deanne Loonin, principal author of the report by the Boston consumer-advocacy group.

The study quantifies a trend that credit counselors have seen recently.

Escaping the trap


Experts offer this advise for seniors caught in the credit-card trap:

Beware of special offers: If you get a credit-card offer in the mail that advertises an incredibly low interest rate, check the fine print. Chances are that the interest rate is only introductory and will rise soon.

Don’t carry your credit card with you every day: If you’re likely to overuse your credit card, keep it at home.

Carry it only when you know you have to use it.

Keep your credit-card number to yourself: Don’t give out your credit-card number over the phone, unless you made the call and are buying something.

Pay as much on your credit-card bill as you can: Pay at least the minimum. The more you pay, the less your interest charges will be.

Make sure your monthly statement is accurate: To correct billing errors, follow the instructions on the back of your statement.

The Dallas Morning News

It found that the average credit-card debt for consumers 65 to 69 skyrocketed 217 percent in the past decade to $5,844. Researchers calculated the inflation-adjusted increase by examining Federal Reserve data on the assets and liabilities of U.S. families.

The consumer group’s report blames the trend on a combination of seniors’ shrinking or stagnating incomes, higher expenses for housing, medical care and utilities, and creditor practices that push seniors to borrow.

“It’s not just that elders have more debt than before, but that many are buried in unaffordable debt,” Loonin said.

Daisy, who doesn’t want her friends to discover her predicament, said she hasn’t been able to pay anything on two of her cards since her utility bills increased last summer.

The late fees have added hundreds of dollars to her balances, and the frequent calls from credit managers have unnerved her. She said she can’t afford the $150-a-month payments they insist she make.

“They probably think I don’t care. Well, I do. I worry about my debts,” she said. “I’ve worked my entire life, most of it six days a week, but I’m not sure I’ll ever be able to pay off these credit cards.”

Suzanne Cobb, who supervises the money-management program at the Senior Source in Dallas, said seniors who have recently retired sometimes try to maintain the same lifestyle they enjoyed during their working careers.

“The problem is that their retirement income is considerably less. After several years of living beyond their means and running up thousands of dollars in debt, reality kicks in, and they seek help,” she said.

More often, though, older adults get into trouble because of unexpected bills from an illness or home repairs, said Deb Taylor, an education specialist with the Consumer Credit Counseling Service of North Central Texas.

“Their credit cards become their plastic safety net,” she said.

The National Consumer Law Center report said Medicare recipients aren’t insulated from medical-debt problems. Seniors average more than $3,500 in out-of-pocket medical costs annually, a 45 percent increase in 10 years, it said.

The National Consumer Law Center study also found widespread financial illiteracy among older Americans, especially among widows who had depended on their husbands to handle the household finances.

“Many seniors have no real comprehension of the disastrous costs and penalties that can hit them if they overborrow,” the report said.

Vergie Hatfield, 72, of Dallas, said her $300 in monthly payments “barely put a dent” in the $8,800 she owes on two credit cards because the interest rates are about 20 percent.

Hatfield, whose Social Security and pension income totals $1,100 a month, said her credit balances have grown over the years as she’s relied on charge cards for groceries and, occasionally, gifts for her grandchildren.

“I keep paying something every month because I need the cards, but I’ll probably carry these debts to my grave,” she said.

Often seniors’ credit-card problems are resolved when they die and their estates pay off creditors to the extent they can. If the value of the estate is negative, heirs are not liable.

Cobb expects credit problems will increase among older adults as baby boomers reach retirement age.

A 2004 study by Demos, a New York research institute, found that consumers within 10 years of retirement are spending an average of one-third of their income on debt payments.

That’s partly because some had children later in life and are paying for their youngsters’ college education into their late 50s and early 60s.

Others have become caretakers for frail parents. Still others have simply spent too much.

“For a variety of reasons, boomers won’t have the nest eggs they’d like, and they won’t have the pensions and health-care benefits that many of today’s retirees enjoy,” Cobb said. “Things will only get worse.”