My 67-year-old dad just admitted to having $100K in credit card debt — and he’s retired with a mortgage, no savings

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My 67-year-old dad just admitted to having $100K in credit card debt — and he’s retired with a mortgage, no savings

My 67-year-old dad just admitted to having $100K in credit card debt — and he’s retired with a mortgage, no savings

The average baby boomer’s credit card balance today is $6,648, according to

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. But some older Americans may be sitting on much larger balances.

Credit card debt is a

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at any age and on any income. But for retirees, it can be exceptionally dangerous. That’s because many retirees live on a fixed income that consists mostly or only of Social Security. And in that situation, it’s hard to keep up with credit card debt payments, let alone eliminate a balance for good.

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If you have a retired parent with a huge pile of credit card debt — say, a whopping $100,000 worth — you may be eager to help them dig out of that *****. But what if they still have a mortgage and no savings? Is there any hope? The good news is that there are some options you can explore.

Tapping home equity could help

It’s not an unusual thing to be retired with a mortgage these days. As of 2022, 41% of U.S. homeowners aged 65 to 79 had a mortgage on their primary home, including home equity loans and

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, according to

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from the ****** Center for Housing Studies of Harvard University.

The good news, though, is that homeowners aged 65 and over have a median home equity of $250,000, according to the

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. So if you’re trying to help a parent dig out of credit card debt, using a home equity loan or HELOC could be a wise move. That’s because the rate on one of these products may be substantially lower than the interest rate their credit cards are charging.

Of the two,

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for one big reason. These loans offer the benefit of a fixed interest rate. HELOC interest, like credit card interest, is generally variable, making ongoing payments less predictable.

Read more: Car insurance rates have spiked in the US to a stunning $2,150/year — but you can be smarter than that.

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(it’s 100% free)

Downsizing is an option

If you have a retired parent with a pile of credit card debt and a mortgage, downsizing could be the ticket to paying off both. As of 2022, the median mortgage balance among Americans aged 65 to 79 was $110,000, according to the ****** Center for Housing Studies at Harvard. If your parent has $250,000 worth of equity, they may be in a position to pay off their mortgage and credit card balance by moving to a smaller property.

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That said, be careful with this approach if the ***** proceeds in question won’t allow your parent to buy their replacement home outright. Mortgage rates are fairly high today, with an average of 6.35% for a 30-year loan, per Freddie Mac.

Now, keep in mind that

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are still generally much lower than credit card interest rates. If downsizing allows your parent to pay off their credit cards but retain a mortgage, that may not be a terrible solution.

You can also, if it’s feasible, have your parent sell their home and move in with you for a few years to get to a better place financially. Of course, the downside here is the loss of privacy for both you and the parent you may be looking to house. But the benefit is allowing your parent to save a few years of

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so they’re more stable. And if you need help with child care, having a retired parent around could save you money.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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