This is the average credit card balance of fifty years
Is yours comparable?
- People in their 50s have higher credit card balances on average than younger people.
- Too much credit card debt could make it difficult to increase your retirement savings, which you may need to do at this stage of life.
As a general rule, it’s a good idea to keep your credit card debt to a minimum, no matter how old you are. But if you’re in your 50s, it’s really important to reduce any existing credit card debt you have.
Why? At this point in life, you may only have about ten years left in the workforce until you are about to retire. And if your retirement savings need a boost, you’ll want the flexibility to pump as much money into your IRA or 401(k) as possible. But the more credit card debt you have, the more money you’ll spend on monthly payments — and the more interest you’ll waste.
How Much Credit Card Debt Do 50-Year-Olds Have?
People in their 50s have more credit card debt than their older counterparts in their 60s and 60s. They also have more credit card debt than those in their 20s and 30s.
The average credit card balance in your 50s is $9,250, according to Personal capital. This is comparable to the average balance for people in their 40s – $9,379.
Now, at first, it may seem surprising that people in their 40s and 50s have so much debt. But also, people at this age may have more expenses than younger people, such as tuition fees or expensive mortgage payments to keep up with.
How to Pay Off Credit Card Debt Effectively
It’s a good idea to get rid of your credit card debt, no matter what decade you live in. But if you’re hoping to use your remaining working years to funnel more money into your retirement savings plan, it’s especially important that you work to get rid of your credit card debt as quickly as possible.
To that end, you have options. The first is to do a balance transfer, which, as the name suggests, allows you to transfer the balances you have on your existing cards to a new credit card with a lower interest rate. You may even be able to land a 0% introductory rate offer on your balance transfer. Granted, that 0% rate might not last more than a year or 18 months, but it still gives you a decent reprieve by racking up more interest on your debt.
You can also consider getting a personal loan. These loans allow you to borrow money for any reason, so you can take out one, use your proceeds to pay off your credit cards, and then pay off that loan at what will most likely be an interest rate. much lower. Plus, with a personal loan, you can lock in a fixed interest rate on your debt, instead of sticking to credit card balances and risking your interest rate climbing over time.
One of the biggest benefits of reaching 50 is being able to make catch-up contributions to an IRA or 401(k). These catch-ups are worth $1,000 and $6,500 respectively. But to take advantage of this option, you will have to release some money. And getting rid of credit card debt is a great way to do that.
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