Friday, October 2, 2009

Credit Card Debt

Posted by Leona Bergstrom

Is Credit Card Debt Ravaging the Lives Seniors?

The downturn in the economy has impacted the lives of all Americans. People have lost jobs, life-savings, retirement funds--and confidence. The impact has been severe on our nation’s midlife and older adults. But a troubling trend is appearing: seniors are racking up credit card debt. “Hit by rising costs, fixed incomes and declining wealth, many older Americans are going deeper in debt by relying more and more on credit cards to pay for basic needs,” states a recent article in The Washington Post, (August 30, 2009).

The article goes on to quote a study entitled “The Plastic Safety Net” by Demos, a non-partisan public policy research group, which found that “average credit-card debt among low - and middle-income Americans 65 and older carrying a balance for more than three months reached $10,235, up 26% from 2005. It was the fastest increase of any age group.” The study reports that, on average, $4,000 of a senior’s credit card debt had covered medical expenses, such as prescription drugs, dental expenses and doctor visits.

The National Consumer Law Center states that credit card payment problems are the leading cause of chapter 7 consumer bankruptcy filings. Since 1993, more than 1 million people aged 50 and older have filed for bankruptcy. The top three reasons: loss of job, medical debt problems and high credit card debt.

It stands to reason that many senior adults in our churches and communities are caught in the turmoil of financial stress. Many are living on fixed incomes and are unable to meet the demands of escalating costs. This is an important time for pastors and leaders to be especially vigilant in assessing the needs of financially vulnerable adults. Here are some suggestions:

* Be alert to changes in mood, higher levels of anxiety or signs of depression. Concern about finances shows on faces and in attitudes.

* Talk with seniors who you suspect could be facing financial strain. Refer them to trusted financial planning professionals. Consider assisting them through your church benevolence fund. Rally to help with practical needs such as home or car maintenance. Provide food or grocery store gift cards.

* Offer classes in how to choose and use credit cards wisely.

* Offer transitional or job training classes.

* Lead people to the Word of God and to lives of trust.

* Pray with and for your seniors asking and trusting God to meet their needs.

The Washington Post article reminds us “older Americans are among the most vulnerable age group in this recession. They are carrying debt loads they can barely handle with their fixed incomes, dwindling retirement savings and, in many cases, devalued homes.” Let us be on the alert for those in our midst who need a helping hand and encouraging word.

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