Home > 2013 > Managing Debt > Borrowers Over 60 Taking On More 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.