This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Shocking Rise In Problem Credit Card Debt Among Seniors

And the prospect of things getting better seems remote. On Dec. 3, 2012, Capital One published research that suggests that more than a third of Americans are currently not saving for their retirements.

Credit card debt the biggest contributory factor

For his 2010 study, The Rise in Elder Bankruptcy Filings and Failure of U.S. Bankruptcy Law, Professor John A. E. Pottow of the University of Michigan Law School asked thousands of people who'd filed for bankruptcy about their experiences. More seniors (two-thirds of them) identified credit card debt -- or, rather, the fees and interest on their credit card debt -- as a contributing factor to their problems than any other cause.

Furthermore, those seniors identified it more frequently than those in younger age groups. They also owed more. Based on his findings, Prof. Pottow calculated that, in 2007, those filers 65 and over likely owed on average $27,213 in credit card debt, while the same figure for those under 65 was $15,499.

Causes of seniors' debt

Of course, plenty of seniors have only themselves to blame for their debt. In November 2010, CESI Debt Solutions, a national nonprofit, published the results of a small-scale nationwide survey that asked retirees about what first got them into financial trouble. A significant number acknowledged factors such as leisure activities, entertainment and travel. But many more had less frivolous reasons:

  • 53 percent, by far the largest group, cited medical expenses. Buying medication/filling prescriptions was especially important.
  • 28 percent said they first went into debt to buy food or groceries.
  • 26 percent had to borrow initially to cover funeral costs.

The Victorians used to differentiate between the deserving and undeserving poor. Maybe it's time we saw indebtedness, especially among seniors, in a similar way, and perhaps even summoned some empathy for those who were forced to borrow to live -- or to bury their dead. This time round, Glenn, it might not lead to genocide.

null
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

DOW 18,273.49 -12.25 -0.07%
S&P 500 2,130.88 +0.06 0.00%
NASDAQ 5,099.6150 +8.8210 0.17%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs