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Tips for Getting Out of Debt
Financial Crunch Driving Senior Citizens to Use
Credit Cards Carelessly
Aug. 18, 2004 - Increasingly, older Americans,
those 55 or older, are caught in a financial crunch that is forcing them
to rely on credit cards for survival. A new study says these seniors use
the cards more often and with less care than adults aged 18 to 34.
Reduced retirement savings due to the stock market,
rising medical costs and fixed incomes often leave seniors no choice but
to rely on credit cards to survive with day-to-day expenses, reports a
study by Money Management International (MMI) and Quest Business Agency.
Financial problems of seniors have become serious,
they say. It is estimated by the American Bankruptcy Institute that
seniors who file for bankruptcy carry nearly twice the amount of credit
card debt than filers in there forties.
MMI offers the following suggestions to help senior
citizens get out of debt and stay out of debt quickly:
> Prioritize your debts. Some debts are more
important to pay promptly than others. For example, you must continue
to make mortgage or rent payments so that you do not lose your home.
You must also pay utilities and provide food. Also, be careful not to
let your insurance coverage expire -- both medical and personal.
> Make informed decisions. Do not feel
"bullied" by collectors into making payments you cannot afford or paying
debts that may not be yours. Visit
http://www.ftc.gov to read about your rights when dealing
with collectors.
> Work with your creditors. Many creditors,
particularly doctors and hospitals, may be willing to reduce your
required monthly payments. If you are able to negotiate a revised
payment schedule, get all of the details in writing to avoid future
problems.
> Consider a reverse mortgage. According to the
AARP, a reverse mortgage can turn the value of your home into cash
without having to move or to repay the loan each month. For more
information, visit
http://www.aarp.org/revmort/.
> Consider mail order. Many seniors are
overwhelmed by the high cost of prescription drugs, and credit cards
seem to be a quick resort. Contact your insurance company and consider
purchasing them through the mail, which is most often less expensive.
> Just say no. Be careful to avoid letting your
children or relatives use your credit cards or by co-signing for loans.
This is a quick way to get into a world of financial trouble.
> Research opportunities for income. If you
have a whole-life insurance policy, you may be able to cash out. You
might also consider taking on a part-time job or selling unneeded
assets.
"Don't be afraid to ask for help," said Kelly Rote,
communications manager for MMI. "Research any and all assistance offered
by local city and county government offices, or seek help from your
local United Way. If you would like help in repaying debts and
establishing a realistic spending plan, visit
http://www.moneymanagement.org.”
About Money Management International
Money Management International (MMI) is a
non-profit, full-service credit-counseling agency, providing
confidential financial guidance, counseling and debt management
assistance to consumers for over 46 years. MMI helps consumers trim
their expenses, develop a spending plan and repay debts. Counseling is
available by appointment in branch offices and 24/7 by telephone and
Internet. Services are available in English or Spanish. To learn more,
call 800-762-2271 or visit
http://www.moneymanagement.org. |
