Credit card debt can be damaging. When you accumulate a balance on a credit card that you pay off over time, you earn interest on it. It costs you more. And too much credit card debt can damage your credit score, making it harder to borrow affordable money when you need it.
It’s easy to think of credit card debt as a young cardholder’s problem. But many older Americans also have credit card balances. And that seems to have intensified in recent years. In 2001, only 24.2% of senior households held credit card balances, according to the National Council on Aging. In 2016, over 34.2% of seniors had done so.
If you are a retiree with credit card debt, it is imperative that you get rid of it as soon as possible. Here’s how.
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1. Stick to your budget
Keeping track of a budget helps you manage your money more efficiently. It also helps you earn more money to pay off your debt.
To set a budget, check your bank and credit card statements for the past year. Calculate the true cost of your expenses. Then adjust your spending in varying categories to free up money and blow up your credit card balance.
2. Consider working part-time
Many retirees live on fixed incomes. You can have a pension from your former employer or receive Social Security payments and IRA withdrawals. If your income is not enough to pay off your credit card debt, you may need to work part time and use your income to get rid of your balance.
This job doesn’t have to be boring or lock you into a rigid schedule. If you are computer literate and have the right skills, look for jobs you can do from home, like data entry or content editing. Or if you’re good with kids, you might consider providing after-school child care for a family. There are often many options available depending on your skills, schedule, and comfort level.
3. Use deals to eat into your balance
You may receive additional money during the year, whether it is a tax refund or some other lump sum. Rather than spending it, use it to pay off the balance you have.
It’s best to avoid credit card debt no matter what stage of life you are in. If you’re a retiree with credit card debt, pay it off as quickly as possible and enjoy your old age without that financial stress. Also, keep in mind that if you don’t pay off your credit card debt in your lifetime, that money comes from the estate you bequeath to your heirs. If you’d rather not burden them, do your best to get rid of that debt.