How to escape credit card quicksand
In this photo illustration the Visa, Mastercard and American Express logo on various credit cards and debit cards are seen beside U.S. one dollar bills.
Anna Barclay | Getty Images
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Audio transcript
CHRIS FARRELL: Nearly half of people are 50 years or older and who have credit card debt use their cards to pay for basic living expenses. That's according to a survey by AARP. The trouble with credit card debt is that it's easy to accumulate and hard to get rid of. In the next installment of my series Buy Now, Pay Later, I look at strategies to pay down that debt.
CHERYL HINES: This is an accessible apartment bill.
[KEYS JINGLING]
CHRIS FARRELL: Cheryl Hines is 74 years old, and she's quick with a smile. Hines, like the ketchup, she tells me, laughing, lives in an apartment in a 55-plus complex on the outskirts of the Twin Cities. She moved into the high rise about a decade ago. She was a nurse for much of her career. She also worked in physical therapy, domestic abuse, and as a receptionist. Hines has credit card debt.
CHERYL HINES: When I married, it was a very traditional. And my ex-husband controlled a lot of the finances. And it was a very traditional marriage. And then when I divorced, I was not very good at handling money, and so I had to learn. And then with some dental issues and stuff like that, I got into debt. And it was easy to put things on credit cards.
CHRIS FARRELL: Hines lives on a fixed income, Social Security, and a small pension. She turned to Lutheran Social Services, a faith-based, health, and human Services organization, for help with their debt. Kim Miller is Senior Program Manager of Partnerships and Financial Education with Lutheran Social Services.
KIM MILLER: Over 30% of the clients that we are seeing recently are 55 and older. So it's one out of every three people that we see would be considered in that category.
CHRIS FARRELL: Miller says people often have a good mental picture of their finances. They know how much money is coming in and how much is going out. But something happens-- a divorce, medical issues, death of a spouse. And they find themselves in debt. High prices for groceries and other basics also upended budgets during the recent surge in inflation rates.
KIM MILLER: There's a lot of expenses that even when you're on a fixed income, it's hard to maintain, like property taxes and homeowners insurance continue to go up, which then affect then people's ability to have for discretionary spending. And then they turn to credit card debt to be able to float the difference.
CHRIS FARRELL: Hines entered a debt repayment plan with Lutheran Social Services. A credit counselor negotiated a lower rate for Hines. And she agreed to automatic monthly payments to her creditors, funneled through the nonprofit. Hines is relieved.
CHERYL HINES: It has helped me to realize that you don't have to feel alone, that there is help.
CHRIS FARRELL: For those looking for assistance, it's critical to work with a reputable, nonprofit credit counseling service. Tonia Brinston is founder of SLAP Financial Consulting. SLAP stands for Sounds Like A Plan.
TONIA BRINSTON: And I also encourage the older population to contact the Nonprofit Credit Counseling Organization to help build a plan or negotiate with the creditors. I refer them to speak to a trusted advisor.
CHRIS FARRELL: Finance experts like Princeton recommend getting in touch with the National Foundation for Credit Counseling. The nonprofit will refer you to vetted credit counseling services in your area.
[MUSIC PLAYING]
CHERYL HINES: This is an accessible apartment bill.
[KEYS JINGLING]
CHRIS FARRELL: Cheryl Hines is 74 years old, and she's quick with a smile. Hines, like the ketchup, she tells me, laughing, lives in an apartment in a 55-plus complex on the outskirts of the Twin Cities. She moved into the high rise about a decade ago. She was a nurse for much of her career. She also worked in physical therapy, domestic abuse, and as a receptionist. Hines has credit card debt.
CHERYL HINES: When I married, it was a very traditional. And my ex-husband controlled a lot of the finances. And it was a very traditional marriage. And then when I divorced, I was not very good at handling money, and so I had to learn. And then with some dental issues and stuff like that, I got into debt. And it was easy to put things on credit cards.
CHRIS FARRELL: Hines lives on a fixed income, Social Security, and a small pension. She turned to Lutheran Social Services, a faith-based, health, and human Services organization, for help with their debt. Kim Miller is Senior Program Manager of Partnerships and Financial Education with Lutheran Social Services.
KIM MILLER: Over 30% of the clients that we are seeing recently are 55 and older. So it's one out of every three people that we see would be considered in that category.
CHRIS FARRELL: Miller says people often have a good mental picture of their finances. They know how much money is coming in and how much is going out. But something happens-- a divorce, medical issues, death of a spouse. And they find themselves in debt. High prices for groceries and other basics also upended budgets during the recent surge in inflation rates.
KIM MILLER: There's a lot of expenses that even when you're on a fixed income, it's hard to maintain, like property taxes and homeowners insurance continue to go up, which then affect then people's ability to have for discretionary spending. And then they turn to credit card debt to be able to float the difference.
CHRIS FARRELL: Hines entered a debt repayment plan with Lutheran Social Services. A credit counselor negotiated a lower rate for Hines. And she agreed to automatic monthly payments to her creditors, funneled through the nonprofit. Hines is relieved.
CHERYL HINES: It has helped me to realize that you don't have to feel alone, that there is help.
CHRIS FARRELL: For those looking for assistance, it's critical to work with a reputable, nonprofit credit counseling service. Tonia Brinston is founder of SLAP Financial Consulting. SLAP stands for Sounds Like A Plan.
TONIA BRINSTON: And I also encourage the older population to contact the Nonprofit Credit Counseling Organization to help build a plan or negotiate with the creditors. I refer them to speak to a trusted advisor.
CHRIS FARRELL: Finance experts like Princeton recommend getting in touch with the National Foundation for Credit Counseling. The nonprofit will refer you to vetted credit counseling services in your area.
[MUSIC PLAYING]
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