Credello: Why Baby Boomers Have Worse Credit Card Debt Right Now

NEW YORK, March 29, 2023 (Newswire.com) - Credello: The Baby Boomer generation includes individuals who were born between 1946 and 1964. Many are parents, and some are grandparents. Most of them are approaching retirement age at the moment. Some Baby Boomers find they have more credit card debt than in recent memory. We will talk about why in the following article. We'll also answer the question, does debt consolidation hurt your credit, since consolidating debt can help some Boomers.

The Pandemic

The pandemic caused a situation where some Baby Boomers who were close to retiring couldn't work. With many companies shut down, some of them didn't have the capability of working from home. 

Because of that, they had to eat into the savings they were stockpiling for their upcoming retirement. Consequently, some don't have as much money saved up now. Some are still retiring, but as they're doing that, they don't have the nest egg for which they were hoping. 

Many of these Baby Boomers are retiring with very little money saved up. They can still collect Social Security, but that's hardly enough to live a lavish lifestyle.

That's not stopping some of them from spending beyond their means. Some have reached the point where they're using credit cards to take expensive vacations, and they're buying costly items, even if they don't know whether they can ever pay that money back. 

Some are spending recklessly with little thought for their futures. If these individuals live for another 20-30 years, they might see significant repercussions for their actions in the not-too-distant future.

Inflation

Inflation is also causing some Baby Boomers to spend more money right now. Even those who still have a frugal mindset see little choice but to use credit cards if they have bills and don't have the money in savings to cover them.

Inflation means the cost of goods and services is increasing. Some older adults with little or no savings don't get enough from Social Security to cover their basic living expenses. In these situations, it makes sense they would get into trouble with credit card debt.

Debt Consolidation

All this is leading some Baby Boomers to look into debt consolidation more than ever before. Debt consolidation means getting a loan from one entity that you can use to pay back all your other outstanding debts.

Some older adults are a little nervous about doing this. Earlier, we mentioned many Boomers trying to determine whether debt consolidation hurts your credit. It can, but usually, the difference is only temporary. That's one reason some Boomers regard it as a viable option in 2023.

Older adults who have outstanding debt on multiple credit cards are frequently looking into debt consolidation as a way to get their spending under control. If they do this, they can usually get a lower interest rate than the average credit card company would offer them.

Younger Generations Can Learn from the Boomers

The younger generations can all learn from the situation the Boomers find themselves in right now. The ones who are spending recklessly can serve as a cautionary tale. Those who are spending beyond their means might get themselves into dire financial straits if they can't control the habit. 

As for the Boomers who are spending more frugally and still getting into trouble with credit card debt, many are finding a path forward by refinancing that debt. The simplicity of having only one creditor and getting a better interest rate is often the more favorable situation they need. 

Younger generations will one day get to where these Boomers are, but in the meantime, they might follow the same habits. If they're using credit cards too much and racking up significant debt, they can refinance. They can also avoid spending beyond their means if they use credit cards only in emergencies. 

Some Boomers who don't have the money to continue living on their own can also move in with their children. That's becoming much more common in America these days. 

About Credello

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Credello is a financial tech company offering personal finance tools that simplify financial decisions through personalized, on-demand recommendations — so users can borrow, save, or invest with confidence.

Credello believes that finding the right financial product should be as easy and interactive as online shopping, and we are on a mission to make that possible. For more information, please visit www.credello.com.