How Can I Protect Elderly Relatives from Financial Loss?
Getting older doesn’t necessarily make you smarter, at least when it comes to using credit.
A new study shows the average credit card debt of Americans age 65 and older increased by 89 percent between 1992 and 2001. During the same period, the number of older adults filing for bankruptcy tripled. The average senior citizen is more than $4,000 in debt and newly retired adults age 65 to 69 owe even more: $5,844 per person.
The report was issued by Demos, a non-partisan public policy group, based on analysis of the most recent Federal Reserve Survey of Consumer Finances and other sources. Economic insecurity is becoming critical for yet another population of Americans, it warns.
Blame it on fixed incomes, rising health care and housing costs and the availability of easy credit. With virtually all medical expenses now payable by credit card, there is evidence to suggest that deductibles, co-pays, dental and vision care, prescription drugs and other uncovered costs played a significant role in the increased credit card balances of many older Americans, according to the study.
The report recommends several solutions, including requiring credit card companies to provide reasonable late payment grace periods and a nationwide maximum interest rate for credit cards and other installment loans.
Although some states still have laws that set maximum legal interest rates, credit card issuers can skirt them by basing their operations elsewhere. Virtually all major credit card issuers are based in states that do not set any limit on interest rates.
Older adults are also prime targets for fraud, especially unfounded or exaggerated health claims. Federal investigators said the elderly are especially vulnerable because many of them are looking for cures for health-related problems. As a result, they tend to invest in unproven products that promise to cure cancer, arthritis, sleep apnea, or circulatory diseases.
If you think an older friend or relative is overspending, start by looking for signs of fraud. That includes a large amount of junk mail, frequent calls from strangers and furtive or secretive behavior.
3 responses so far ↓
1 peach // Sep 14, 2008 at 3:14 pm
My dad exhibits all of those symptoms of overspending. He is secretive, he gets lots of junk mail (even though I have signed his name at the no junk mail web site and have sent numerous letters to individual junk mail addresses), he gets calls from strangers trying to sell him get rich quick schemes, and he gives money to all charities. I have had numerous talks with him, and he seems to control his spending for a few weeks, but then he reverts back to his spend-thrift ways. He has all of his faculties so declaring him incompetent is not an option. What else can I do?
2 lynda // Jul 30, 2009 at 12:05 pm
I think a bunch of lazy young people see what their parents have and don’t want to work to get the same, they want their parents to just go die so they can step in and spend the money the way they think it should be spent. It’s rediculous. Even if the average senior had 5,000 in debt, that’s nothing. It’s certainly secure. The house and car are paid for and they know they could go any time. They also know if they get sick there’s not going to be anyone there to offer to care for them, just bury them!
3 jonas // Jul 30, 2009 at 1:43 pm
I am retired, and don’t use credit cards at all, when I was a young man of 21 I got caught up in credit card debt, at the time I thought it was a lot of money, $1200.00, tho not much by todays standards, I payed off the card, and have never ran a balance on a card again, and I hope in my senior life I will be smart enough to not start now.
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