Many older adults carry credit card debt from month to month, but that is not necessarily a sign of profligacy. In fact, nearly half of respondents surveyed by AARP said they consistently have credit card debt, with many of the debts incurred due to unexpected expenses.
Credit card debt remains the most common type of debt carried by adults over the age of 50. Not surprisingly, half of those surveyed said that medical expenses contributed to the debt they carry month to month.
Additionally, nearly nine in 10 respondents reported that unexpected expenses contributed to their credit card debt, with the most common type of unexpected expense being vehicle-related costs.
Older adults can often find themselves caught of guard by significant expenses, especially when it comes to vehicle costs, which can arise unexpectedly from mechanical breakdowns or accidents. However, the good news is that, for the most part, these expenses are not causing undue hardship for credit cardholders. Indeed, half of all older adults with credit card debt still report feeling financially secure.
Lack of Insurance
Vehicle-related debt is just one form of debt that keeps consumers up at night. Medical debt is another common issue among U.S. adults. Among those who said medical care was driving their credit card debt, dental expenses were the most frequently cited. Once again, these are often unexpected costs, and many older adults remain uninsured. Medicare doesn’t offer dental coverage for wellness-related or preventive procedures, only those deemed medically necessary.
Other common medical reasons respondents reported carrying credit debt included areas where they are uninsured or underinsured, such as vision care and prescription medications.
Avoiding Medical Credit Cards
Despite this debt, AARP found that older adults have largely avoided using medical credit cards—a special type of card typically offered through doctor’s offices, hospitals, or other healthcare providers. Three-quarters of respondents reported not using such cards, while only 12% said they carried debt on a medical credit card.
This may be due to growing scrutiny of the medical credit card industry in recent years. In 2023, the Consumer Financial Protection Bureau (CFPB), the Department of Health and Human Services (HHS), and the U.S. Department of Treasury launched an inquiry into medical credit cards and installment loans amid concerns that incentives provided to healthcare providers to promote these financial products were driving patients deeper into debt.
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