By Jill Jaracz


5 Min. To Read

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While the song "Sixteen Tons" is about a coal miner, middle-income Americans over 50 could very well sing its lyric "another day older and deeper in debt" today. A recent survey from the AARP Public Policy Institute finds that older Americans have more credit card debt than younger people.

AARP collaborated with Dēmos, a research, policy development and advocacy group, for the 2012 National Survey on Credit Card Debt of Low- and Middle-Income Households. The study finds that in 2012, Americans over 50 in middle-income households carried an average balance of $8,278 on their credit cards. Compared to those under 50, these households average about $2,000 more in debt.

The AARP finds this statistic troubling, given that these households are heading toward retirement--or are even in retirement--while holding significant amounts of debt. This age group has also increased its amount of credit card debt compared to the trend Dēmos found in its 2008 study.

However, the study also shows that these results are mainly due to the tough economic environment, and not because this age group is fiscally irresponsible. While most of this age group is not prone to using credit cards to cover basic living expenses, such as food and housing, one-third of over-50 households said they had had to use plastic to cover paying bills.

The over-50s also use credit cards as a "plastic safety net" to help cover emergency expenses, such as unexpected car or home repairs. Medical expenses have been another major factor in the levels of credit card debt of this age group. While four out of five Americans over 50 have out-of-pocket medical expenses, over half of them are unable to pay off these expenses when the credit card bill is due. The respondents note that prescription drugs and dental expenses being the biggest contributors to this debt.

Unemployment or a decline in income can also leads to more credit card usage, and the struggling economy has had an effect on this segment of the population. About one-quarter of the over-50 age group has dealt with job loss that was severe enough to contribute to their credit card debt. Fifteen percent said it was the main cause of this type of debt.

The study also found that older Americans are more apt to take on credit card debt in order to help other family members. Just over 20 percent of people over 50 responded that they added to their own debt levels to help their relatives pay down debt.

One good item of note: This study did find that the average credit card debit of households has decreased from 2008. While households over age 50 have trimmed off about $1,600 of their credit card debt, those under 50 have erased over $3,700 of credit card debt over the last four years. Both groups said they had debt spread across an average of three to four current credit cards, as well as another card that was canceled or expired, but on which they were still paying debt. A majority of the respondents also planned on erasing their credit card debt within the next two years.

Older Americans do have strategies to help them get rid of their credit card debt. They're more apt to make larger than the minimum payments, and they also tend to use tax returns or work more to have the money to pay down debt. Drawing money from retirement funds to help pay down debt is another strategy, one that the study says "is a potentially troubling development."

The AARP/ Dēmos survey consisted of a nationally representative sample of 997 American households carrying at least three months of credit card debt. 565 of these participants were over 50 and the remaining 432 were under 50. About 95 percent fell into the $20,000 to $99,000 income range.

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