Credit as a Senior: Should You Use It and What To Be Careful Of
As a senior, should you use credit cards or other forms of debt? The answer to that question is very personal and is something you'll need to consider carefully, perhaps along with any family you trust or supporting professionals. Responsible use of credit may be something that can help you manage your finances and live life to the fullest, but there are some things seniors at Bethesda Gardens Frisco assisted living community should know before they take out a loan or swipe a card.
While many financial experts advise people of any age to live within their means and never buy anything they couldn't pay cash for, a credit card has some benefits. This is especially true for seniors who enjoy traveling. You typically need a credit card to book airfare or hotel rooms, and you may not want to have those companies putting holds on your bank account (which occurs if you use your debit card instead of a credit card).
Whether you're considering a reverse mortgage on your home to help cover the cost of your assisted living apartment or you're applying for a credit card to use when traveling, remember that all credit has to be paid back eventually. Even when it doesn't fall due for years or need to be paid back right away (such as with a reverse mortgage), your estate may need to deal with the debt if you don't.
On the flip side, you can't be turned down for a credit card or any other loan simply because of your age, and companies can't discriminate against your income because it comes from a retirement fund or Social Security. If you otherwise meet the income and credit history requirements for a credit card, for example, you can't be denied because of age. The federal Equal Credit Opportunity Act actually enforces that rule.
If you're a senior who does decide credit is the right decisions for you, you'll have to be careful about responding to emails and phone calls. Many scams revolve around seemingly legitimate calls to collect money you owe on a debt. If you're going to use credit, make sure you keep up with all your accounts so you know whether or not you owe someone money; that way, you can hang up on callers that aren't legitimate.
Red tape, online access, robocalls and automated phone systems are just a few things that can be frustrating for any individual trying to manage their money. If you're not comfortable dealing with your accounts or tend to forget to make payments, consider asking a trusted family member to assist you or avoiding credit cards altogether.
Credit is a tool, and like any tool, it requires someone skilled to wield it. Seniors who take the time to learn about their accounts and manage them properly may find credit is beneficial to their lives.
Posted on Mon, March 4, 2019
by Shawn Deane