Home > 2013 > Managing Debt

Borrowers Over 60 Taking On More Debt

Advertiser Disclosure Comments 2 Comments

over-60-debtMillions of Americans have sought to reduce their debt obligations as they faced the reality of dealing with these balances in the wake of the financial crisis. However, one age group has defied that trend in the last few years.

Borrowers aged 60 years old and up saw their average outstanding debt across all types of accounts increase slightly between October 2009 and the same month three years later, according to new data from credit scoring company FICO’s Banking Analytics Blog. Despite the changes, though, they typically have far less debt than most other age groups.

Consumers from 18 to 29, 30 to 39, 40 to 49, and 50 to 59 all saw their debts tumble during the same period, especially among those in the second of these age groups, the report said. In fact, for those in their 30s, as well as consumers 18 to 29, debt now stands slightly lower than the levels observed in October 2005, well before the financial crisis began to take hold. Meanwhile, people age 40 and up tend to have more debt than they did prior to the onset of the downturn in early 2007.

Perhaps as a result, the proportion of younger people with higher credit scores grew over the seven-year period examined, the report said. Through October 2012, slightly more than a third of all consumers who had credit ratings of 760 or more, up from 32.2 percent three years earlier, and 29.6 percent in 2005.

Meanwhile, that has likewise led to a decline in people in their 40s and up having their scores fall into the same category, the report said. Between 2009 and 2012, the percentage of people in their 40s, 50s, 60s and up who had scores of 760 or better all declined, and those in the oldest group saw the most appreciable drop; in 2005, 55.4 percent of those with the top-flight credit ratings were in the oldest age group, but that number dwindled to just 51.6 percent in the most recent year examined.

People age 60 and up tend to have significantly less debt in general, largely because they have successfully paid off their mortgages and auto loans, or other lines of credit, that younger consumers tend to carry for years or even decades.

Image: iStockphoto

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

  • http://www.avoidbk.com/ Jared Strauss

    This is great info on the various demographics. I would love for you guys to write about the recent and growing epidemic of student loan debt for people that are 60 and older. It’s a new phenomenon that is apparently fueled by tighter student loan lending requirements.

    To put it in perspective: in the first quarter of 2005 there were 8 billion dollars in student loans that were owed by people 60 years old or older.

    As of the fourth quarter of 2012 there is 43 billion. That’s more than a 500% increase in a very short period of time.

    I’m very concerned about this situation because social security checks can be garnished (up to 15%) if these student loans they’re cosigning for go into default.

    I don’t know too many seniors that could afford to take that hit and still adequately survive.

    Please see – http://www.newyorkfed.org/studentloandebt/ and click on “60 and up” in the chart to see what I’m talking about.

    I would love to see you guys raise awareness of this issue so people know to think about these possibilities before making such a huge commitment.

  • http://www.avoidbk.com/ Jared Strauss

    This is what happens when incomes don’t adjust with “true” inflation. And since the 60 and up crowd is in a virtual zero interest environment in regard to CD’s and other reliable savings vehicles they have no way to “safely” increase their incomes to make up the deficit. Food, energy, and insurance are all staples of life and are out of control.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team