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Another decade older and deeper in debt



Published: Wed, July 10, 2002 @ 12:00 a.m.



In the last decade, as costs of living for the elderly have skyrocketed -- notably the cost of health care and prescription medicine -- and retirement funds have dwindled -- often because many seniors are living longer than they anticipated -- the amount of debt carried by seniors increased by 188 percent from $8,000 in 1992 to $23,000 in 2000. America's vulnerable elderly population deserves protection from this looming financial crisis -- even if some measure of that protection is better credit counseling and education through which seniors can protect themselves.

Through credit cards, home equity loans, installment loans, vehicle loans and margin accounts from brokerage accounts, many seniors have reached the stage where they cannot possibly repay all they owe. It's doubtful, of course, that credit-granting businesses will be left holding the bag.

The costs will simply be passed on to other consumers in increased charges of one kind or another. Sure, people are responsible for their own debt, but many of the elderly don't understand what they're getting themselves into.

Excessive senior citizen debt has a number of causes. Many widows who never handled their finances before the loss of their spouses often don't realize the actual cost of the charges they may make. Some older Americans may actually be obtaining credit cards in their own names for the first time in their lives, and under the federal Equal Credit Opportunity Act, it's against the law for a creditor to deny credit or terminate existing credit simply because of an individual's age.

The fine print

When the details are in the small print -- often a challenge for those with perfectly adequate vision -- elderly eyes may have considerable trouble making sense of applicable rules and charges.

Then too, the rapid increase in the costs of drugs seniors need for good health have outstripped the financial resources of many. Retirees on fixed incomes and those whose benefits have been cut simply don't have the cash for these basic necessities, and credit cards become a path of last resort.

Of course, the obvious need is for some sort of prescription drug coverage for senior citizens. But while the Congress wrangles over the details, seniors facing troublesome debt shouldn't hesitate to obtain low- and no-cost credit counseling. Information is available at public libraries and on the Websites of the Federal Trade Commission and the American Association of Retired Persons. Above all, the FTC warns against credit repair clinics, which the agency says, charge a lot but "can't do anything for you that you can't do for yourself. *

Many seniors are reluctant to discuss their finances with their adult children, but they should. A little embarrassment should be easier to bear than dunning creditors and financial catastrophe.




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