Middle-income workers over the age of fifty owe more on their credit cards than their younger counterparts, according to a recent study by the American Association of Retired Persons and Demos. The “Middle Class Security Project,” by the AARP Public Policy Institute studied the struggle to build and maintain retirement funds.
The report looked at low and middle income households carrying credit card debt for three or more months last year.People over 50 carried an average credit card balance of $8,278, while those under 50 averaged $6,258. The report also found that of the middle income households that carried credit card debt, a third of older households used credit cards to pay for basic living expenses like buying groceries or paying for utilities.
The report also found that, of the nearly 1,000 households sampled nationally, half of older Americans also use their credit cards to pay their medical expenses. Older Americans kept an average of $893 in medical expenses on their credit cards, compared with an average of $746 for people under 50. About one third of indebted households in both age groups reported that they decided to forgo a medical test or went without treatment. According to the survey, 35 percent of both groups said they skipped or postponed filling prescriptions to cut medical costs.
“Unless we are able to reverse the trends that are driving the decline of the middle class, many of today’s middle class workers will not have a middle class retirement,” according to AARP CEO A. Barry Rand, noting the trends highlighted in their research threaten the financial security and health of people in their 30s and 40s as well as those over 50.