An estimated 46% of U.S. households have credit card debt, according to the .
The average household owes $7,226 in credit card debt and pays an average of $181 a month to keep up with their minimum required payments. While credit cards can be useful, they can also lead to a long-term cycle of debt. For people in , especially those living on a fixed income, it might be better to steer clear of credit cards altogether.
If that’s not possible, there are at least a few things retirees should never use a credit card to buy. GOBankingRates spoke with Jason B. Ball, CFP, founder of , about what he thinks retirees should avoid buying with credit cards.
Earning passive income doesn't need to be difficult. “Medical bills can sneak up on you, and relying on high-interest credit cards to cover these costs is a recipe for disaster,” Ball said. “As a CFP, I’ve seen too many retirees overwhelmed by debt from essential health services.
” Medical expenses are hard to avoid. In 2020, roughly 3.9 million adults ages 65 and older had unpaid medical debt totaling an average of $13,800 per person, according to the .
But there are better ways to pay than using a credit card. “Consider negotiat[ing] payment plans with healthcare providers or use health savings accounts (HSAs) if available,” Ball said. “This strategy avoids those crippling interest charges and keeps your finances healthier.
” HSAs are primarily designed for medical expenses. With one, you can withdraw money to cover.