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Retirees Are Drowning in Credit Card Debt: 5 Ways To Take Action Now

May 7, 2025

4 min Read

Written by John Schmoll

Edited by Cory Dudak

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Credit card debt can be suffocating for many Americans. During your working years, though, you have better opportunities to repay the indebtedness. The same is often not true for retired Americans. A recent AARP survey revealed a growing number of retired Americans carry credit card debt — to the tune of 42% of people aged 65 to 74, and 35% over 75.

Debt can threaten the financial health of many, especially for those juggling healthcare costs or other financial burdens. Here are five ways to attack credit card debt in retirement.

Use a Balance Transfer Card

High-interest credit cards make repayment challenging at best. For Americans without spending problems, a balance transfer card can be a good solution. These allow people to repay debt with a 0% APR for up to 21 months.

Repaying the indebtedness before the promotional rate ends is key. Otherwise, it’s likely the credit card will charge interest for the entire amount transferred.

“There are tools like zero-interest balance transfer credit cards…. These can help in the short term, but they are not ideal solutions. In fact, they often create more problems if not used carefully,” said R.J. Weiss, CFP and founder of The Ways to Wealth.

Retirees not wanting a new credit card can contact the bank and ask how they might help. The bank may be willing to reduce the interest rate for good customers.

Consolidate Your Debt

Juggling multiple high-interest credit cards with balances is a major debt accumulator. Debt consolidation services allow Americans to put those all into one lower-interest loan to aid in repayment.

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Unfortunately, debt consolidation loans can include fees and pose problems if payments are missed. “Debt consolidation should be considered only after reviewing income and expenses and finding that there is no clear path forward,” noted Weiss. :If a retiree has already trimmed spending and still cannot make real progress, consolidation may help.”

Pick Up a Part-Time Job

Retirees can work in their golden years to supplement their income. Even for people receiving Social Security benefits, it’s possible to work without negatively impacting payments.

According to the Social Security Administration (SSA), Americans can earn up to $62,160, as of 2025, and not have benefits reduced. Working a part-time job can be a good way for retirees to eliminate debt if they’re on a limited income. Just make sure to devote earnings to the indebtedness.

Reduce Your Spending

Spending less in retirement can be difficult, especially for those with increasing healthcare costs or dwindling resources. For those not on a restrictive fixed income, analyzing spending is best.

Identify expenses you can live without and apply the savings to indebtedness. It doesn’t necessarily need to be long-term cutting, either. “The ideal situation is to temporarily reduce spending in order to get ahead of the debt,” added Weiss. “If the debt is left alone, it will continue to grow and become harder to manage over time.”

Take Out a Home Equity Loan

This strategy may not work for all retirees, but older homeowners can take a home equity loan or home equity line of credit (HELOC) to repay credit card debt. Rates are commonly lower than credit cards, allowing seniors to save money on interest.

It’s important to proceed with caution. Taking funds from your home puts an unsecured loan against it. Missing payments can eventually lead to foreclosure. Downsizing is a good alternative for retirees not wanting to bear that risk.

Having a plan is essential when managing credit debt in retirement. Freedom from debt is achievable — albeit more challenging — without regular income coming into the budget.

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