Senior Consumer Debt Report, 2020 Credit Cards, Auto Loans, Mortgages
for Ages 65+ and COVID-19

· Published: May 2020

U.S. consumer debt has reached historic levels, growing by nearly $2.3 trillion since 2009. Total consumer debt in the U.S. today stands at $14.1 trillion, a record high, according to credit reporting firm Experian.

So what does debt look like for the average older adult, how do their credit habits compare to all Americans, and what role will the coronavirus crisis have on their financial status and tolerance for carrying additional debt?

We asked older adults ages 65 and up about their use of credit, mortgages, auto loans and medical debt and whether they were fearful over the potential negative impact of coronavirus on their pocketbooks.

Key findings:

  • About 8 in 10 seniors have some form of debt, whether that’s a mortgage, credit card balance, medical debt, an auto loan or something else.
  • The average senior carries about $4,400 in credit card debt, compared to an average of nearly $6,200 for all Americans.
  • Thirty-six percent of seniors carry a balance on their credit cards. While this is better than the general public (47 percent), this is a much higher rate than in 2001, when just 24 percent of seniors carried a balance.
  • Nearly 1 in 3 seniors say COVID-19 has changed their financial situation. Twelve percent say the pandemic will require them to take on more debt

The Shape of Senior Debt

Our survey indicates that 79% of all seniors have some form of debt, which could include mortgage debt, credit cards, auto loans, medical debt or something else. Credit card debt was the most common for seniors, outpacing all three of the other specific categories we asked about.

Few of the older adults in our study said they had medical debt, which is likely a result of our survey participants all being at least 65 years old and most them being on Medicare.

In some cases, seniors don’t vary much from all adults. For example, about 55% of all U.S. credit card-holders have debt, which is just slightly above the rate for seniors. And about 17% of Americans have past-due medical bills, while 13% of seniors said the same in our survey. But, according to our study, older adults are considerably less likely to have mortgages and auto loans.

We also asked survey participants about whether they were currently drawing a pension or Social Security (less than 8% weren’t receiving either), and their answers were mostly similar to all seniors, though there were some notable exceptions.

For example, while 13% of all seniors and Social Security recipients said they didn’t have medical debt, that number was even lower for those with a pension (9%), while both pensioners and Social Security recipients were more likely to hold credit card debt, 54% and 56%, respectively.

Debt Levels & Credit Card Habits

While our survey showed that the majority of seniors don’t carry mortgage, auto or medical debt and only a slight majority have credit card debt, those who do have these balances tend to carry high levels of debt.

High balances were much less common when it comes to medical debt than to other types of debts, though about one-third of seniors with credit card balances have totals exceeding $5,000, and about 6% of seniors have medical bills reaching more than $20,000.

About 3 in 4 seniors in our survey have two or more credit cards, while only about 7% said they don’t have any. These numbers generally are similar when looking only at those collecting retirement income, though people on pensions are the most likely to have at least two credit cards.

Thirty-six percent of seniors with credit cards do not pay their balance in full each month, which is a major rise from 24 percent in 2001. There weren’t major differences with Social Security or pension recipients, but seniors are far more likely to pay their full balance and much less likely to pay only the minimum than the general credit card-owning public.

Finances, Debt & COVID-19

Nearly two-thirds of Americans said they are concerned about their own finances as a result of the expanding economic fallout of the coronavirus pandemic, and as joblessness continues to increase, there’s ample reason for pessimism.

But does this hold up among those whose working days are behind them, or soon will be? According to our study, about 31% of seniors said the COVID-19 crisis had already changed their financial situation, but few respondents said their debt load had changed because of the crisis — so far. No notable distinctions existed when comparing all seniors to those on Social Security or pensions.

Just over half of seniors say they don’t expect their debt load to change because of the COVID pandemic, but about 12% said they anticipated the need to take on more debt in the future to weather the crisis.

In no income bracket did a majority of people say the virus had already changed their financial situation, but those making the least were the most likely to indicate that was true. Conversely, those making the highest income were most likely to say their financial status hadn’t changed.

About SeniorLiving.org Research

SeniorLiving.org is where seniors and their loved ones can find and compare housing options for seniors, including assisted living, in-home care, and everything in-between. We publish research on issues facing assisted living and aging, and cover governmental programs, and economic and social issues facing seniors. Data for this report is from a survey of more than 600 seniors age 65 and up between May 10th and May 16th, 2020, and also from the National Council on Aging. See also our accompanying research on financial confidence of seniors.