3 Debts Hitting Boomers Hardest in 2026 — and How To Stop Them From Draining Savings

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The average American with personal debt now owes $21,700, according to a new Northwestern Mutual study. But how that debt is distributed varies between generations.

Among boomers with debt, credit card debt is the most common (29%), followed by auto loans (11%) and medical bills (5%). While each presents different risks, credit card balances tend to do the most long-term damage because of high interest rates — which is why experts say they deserve special attention.

Here’s a closer look at why credit card debt is so common among this generation, how they can best tackle it, and how to balance paying off credit card debt and other types of debt.

Why Credit Card Debt Is So Common Among Boomers

Nearly 1 in 3 boomers have credit card debt — and there are several reasons for this, according to Dexter T. Wyckoff, growth and development director and financial advisor at Northwestern Mutual.

• High APRs and missed fine print: “Carrying balances exposes consumers to interest and penalties that make pay-down harder.”
• Convenience and budgeting blind spots: “Easy card use plus unclear budgets let small overspends accumulate into revolving balances.”
• Inflation and cost pressures: “Americans cite inflation as the top obstacle to financial security, and boomers are notably pessimistic about inflation rising. Rising prices can make it hard for people to manage debts, especially those on a fixed income.”
• Insufficient emergency buffers: “More than half (52%) of adults admit they prioritize building wealth over protecting assets, leaving gaps that turn one-off emergencies into credit card debt.”
• Alternative payment plans and complexity: “Widespread use of buy now, pay later and multiple payment plans complicate tracking and repayment.”

Considered together, these factors explain why many boomers still carry credit card balances.

How Boomers Can Pay Down Credit Card Debt in 2026

According to the Boston Fed, only about 35% of Americans pay their credit card bills in full each month. However, there are ways to break the cycle and get out of credit card debt.

Here’s what Wyckoff recommends.

• Keep spending disciplined: “Revisit your budget and stop impulse buying.”
• Create a financial safety net: “Build a one-month emergency fund. The study finds that many Americans underemphasize protecting assets, so one surprise expense often becomes credit card debt.” Pay minimums until that safety net is established, then apply extra cash to debt.
• Negotiate rates or consider a balance transfer card: “The average card APR is high, so lowering rates or moving to a 0% promo can materially reduce interest costs — but promos are temporary and may have fees.”
• Choose a debt repayment method: Use the avalanche method (tackle the card with the highest APR first) or switch to a snowball (start with the lowest balance first) if you need quick wins to stay motivated. “Avalanche minimizes total interest paid; snowball builds momentum.”
• Avoid piling on new payment plans: Avoid things like buy now, pay later and multiple promos while paying down balances.
• Make frequent payments and automate where possible: “Pay on time to protect your credit score. Payment history drives 35% of your credit score; frequent payments reduce interest accrual and make course corrections easier.”
• Consider professional help: “According to the study, people with financial advisors feel far more financially secure. Advisors can help prioritize between debt repayment, saving and other goals.”

How Boomers Should Prioritize Debt Repayment

Some boomers may be dealing with multiple types of debt, including credit card debt, auto loans and medical debt. This can feel overwhelming, so it’s important to create a plan that helps you prioritize repaying these debts effectively.

“Pay at least the minimum on every account,” Wyckoff said. “Set autopay to avoid late fees.”

Focus any additional funds toward the most urgent debt. Here’s how Wyckoff said to prioritize your debt repayment:

• “Move quickly to bring delinquent or in-collection accounts current — this can help your credit.
• After high-interest balances are gone, focus on debts without tax benefits — e.g., personal or auto loans — before those that may provide tax deductions.
• Mortgages are generally ‘good debt’ and often last on the list. Accelerating them usually isn’t the top priority unless rates are high and other debts are cleared.”

Debt Strategies for Retirees Living on a Fixed Income

Many boomers are retired and living on a fixed income, which can make paying down debt more challenging.

“Outside of prioritizing, getting organized and paying down bad debt, retirees on fixed incomes should look at their debt and make some additional decisions,” Wyckoff said.

Here’s what he said retirees should take into account:

• It’s OK to keep some low-interest debt: “When deciding which debts to keep and which to pay off, it can make sense to keep low-interest debt if paying it off would deplete your emergency savings or if the loan interest is tax-deductible — e.g., mortgage interest.”
• Consider refinancing or consolidation carefully: “A lower fixed-rate personal loan or balance transfer can lower interest, but factor in fees and whether you can meet promo terms. Refinancing secured debt — i.e., a home equity loan — is an option, but default risk could put your home at stake, so proceed cautiously.”
• Know your liquidity options before tapping them: “Check emergency savings first. Review the cash value of a permanent life insurance policy if you have one — some policies allow borrowing or withdrawals.”
• Take a conservative approach: “Avoid moves that could reduce long-term security — e.g., exhausting an emergency fund or taking on new high-risk borrowing. If you’re unsure, get advice from a trusted financial advisor before using home equity or retirement funds.”
• Look for modest ways to boost cash flow or reduce expenses: “Trim discretionary spending and reallocate that money to debt service. If appropriate and feasible, consider part-time or occasional paid work.”
• Get professional help if needed: “A financial advisor can help prioritize payments, analyze whether certain debts should be kept, and recommend safe liquidity strategies tailored to your retirement income and goals.”

While tackling debt in retirement is challenging, it’s possible if you stick to the basics — track every debt, always make minimum payments, negotiate rates and preserve emergency savings. Use refinancing only after carefully weighing costs and risks, and consider consulting a trusted financial advisor to help weigh all your options.

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