Posted: Dec 5, 2010 10:18 PM by John Romero
Updated: Dec 6, 2010 3:35 AM
More and more, seniors on a fixed budget are turning to credit cards to help them through tough times. "They're using it (credit cards) for gasoline, they're using it for food, they're using it for prescriptions, they're using it for co-payments." explains Eileen Doherty, Director of the Colorado Gerintological Society. But an alarming trend is beginning to take shape in this tough economic time. Many seniors are racking up debt knowing they will never pay it back. "I have seen people put things on credit cards that are just mind boggling. And you know going in they do not have the ability to pay them back." say Doherty.
Studies show people 55 and older now make up more than 20% of all bankruptcies. The high cost of medical bills and prescription drugs lead many seniors to swipe away. "It's extremely sad, because they have tried all their lives to be upstanding, worthy, pay their bills, do the right thing, and now they are faced with limited income." says Doherty. "A shocking statistic came out recently that said 40% of retired Americans had raked up credit card debt and were not concerned about how they're going to repay it." adds Kim McGrigg with Money Management International.
The worry is many seniors are concerned about their mounting debt, but may be too quiet or too proud to discuss it which will only spiral them further into debt. The biggest downside of this could fall to a senior's kids and family. McGrigg says any unpaid debts at the time of someone's death will likely come out of an estate. That could wipe out any inheritance a retiree is hoping to pass on.