Credit card debt can stymie progress toward financial goals. Dealing with high-interest debt in retirement can be exponentially worse. More retirees are struggling with credit card debt, with many using cards to pay for necessities. Left unchecked, this can derail years of retirement planning. Fortunately, there are options for credit card debt relief for seniors that make eradicating debt possible. Prudent action makes debt freedom achievable, allowing you to experience the golden years you always envisioned.
Credit card debt among seniors: AARP insights
High-interest credit card debt is often burdensome. Facing this as a retiree is even more challenging. A recent AARP study reveals a growing number of retirees are saddled with credit card debt. The report shows the following:
- 52% of Americans aged 50-64 carry debt
- 42% of people aged 65-74 carry debt
- 35% of people over 75 carry debt
What’s more concerning is the amount of debt carried by many seniors. “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,” the study notes. Moreover, 20% of retirees expect it to take at least five years to repay their indebtedness. Rising costs and unplanned medical expenses comprise much of the blame for increased debt for many retirees.
Smart strategies to pay off credit card debt in retirement
There is no best answer for how to tackle credit card debt. Eliminating indebtedness depends on numerous factors, most notably the complete financial picture for the person.
The following strategies can be worth considering for retirees needing to pay off credit card debt.
Balance transfer card: For people with good credit, using a balance transfer card can be a good way to repay debt. These 0% APR cards provide cardholders as long as 21 months to repay debt with no interest. However, if you don’t repay the indebtedness before the promotional rate ends, you risk being charged interest for the entire amount transferred. Only consider these cards if you’re committed to repaying them before the period ends.
Work a part-time job: Retirees often dream of a life without work. Unfortunately, that may not be possible for seniors in debt. If you’re receiving Social Security benefits, you can earn up to $62,160 in 2025, before having benefits deducted. Consider part-time jobs like tutoring or at-home work and devote the earnings to repaying debt.
Home equity: Social Security benefits comprise 31% of the income for people over 65, according to the Social Security Administration (SSA). For those who depend on this income, it’s a challenge to determine how to pay off credit card debt when you have no money. Accessing home equity is one option. Interest rates are typically lower than credit cards, providing the ability to save money. Unfortunately, this puts a loan against the house, and missing payments can ultimately result in foreclosure. Downsizing is also a suitable substitute.
Debt consolidation: Managing multiple monthly payments can be challenging. Seniors with credit card debt can consider debt consolidation. This lets you roll all cards into one monthly payment via a lower rate, singular loan. Benefits aside, debt consolidation often carries fees and presents a risk to your credit score with missed payments.
How to negotiate credit card debt
Credit card debt is a concerning issue, particularly if you miss payments. Ignoring them may seem like an option, but it’s unwise. For retirees not wanting to pursue earlier solutions, negotiating debt is possible.
Contact the credit card company and ask what they can do to help. If you’re a good customer, they may offer to reduce your interest rate. The company may ask what plans you have to repay the card. Review your budget before the call to identify ways you can pay down the card.
Some issuing banks may offer debt forgiveness for seniors or some other form of settlement. This reduces the principal owed. This will negatively impact your credit, and you may face taxation on the amount forgiven. Debt resolution companies can work on your behalf to accomplish similar results.
Unfortunately, the space is rife with scams. “As with other things in life, there aren’t any guarantees. If you choose to work with a reputable debt resolution company ask for results it has achieved for past clients. A reputable company will be open and honest,” notes Austin Kilgore, director of corporate communications at Achieve Center for Consumer Insights. In short, perform due diligence before selecting a firm to help.
➤ SEE MORE:How to get your credit ready for retirement
What retirees should avoid when tackling credit card debt
Credit card debt can be shaming, and that fear can lead many to ignore the problem. That’s particularly problematic for retirees continuing to spend with no plan to stop.
“Avoid avoidance. It can be easy for some people to just avoid the problem. It doesn’t go away. The good news is that there will be some solution that will work for you,” notes Kilgore. Avoiding the problem only makes the issue worse.
Ignoring wisdom is another issue retirees need to avoid. Some solutions are fairly straightforward, but still pose risk, as with 0% APR cards. Others carry increased risk, like credit card debt forgiveness for seniors, as landmines are plentiful. “Avoid jumping at programs that promise to eliminate your debt quickly and easily. If it sounds too good to be true, it probably is. Research options carefully. If you are thinking about working with a debt relief company of any type, be particularly careful of red flags,” Kilgore adds.
Resources for seniors managing credit card debt
Blindly going into managing credit card debt often worsens the situation. Thankfully, there are ample resources for retirees searching for help handling credit card debt.
For those considering debt consolidation or settlement, it’s advisable to select a firm that’s certified with the National Foundation for Credit Counseling (NFCC) or Financial Counseling Association of America (FCAA). Member organizations are non-profit and reviewed every two years. Not only can they help you make a plan, but they can also help you create a budget.
The Consumer Financial Protection Bureau (CFPB) provides educational tools and materials to help understand how to work with debt collectors and report fraud.
And don’t overlook Area Agencies on Aging (AAA) as they may help identify local opportunities for financial counseling and offer advice on managing debt.
