Business & Work

Julia Kukiewicz:  Aviva's Real Retirement report, released this month reveals that a third of over 55s now have unsecured debts of one form or another. On average, pre-retirees (55 – 64) in credit card debt have a £4,199 outstanding balance and the long-term retired (75+) have only slightly less, £3,369.

Since those in the middle age-range have the lowest outstanding credit card balance - on average, £2,121 – it seems that many are paying off debts going into retirement and then slipping back as costs rise or savings start to run out.

Don't let that be you

Here are three tips for staying credit card fit over fifty.

Cutting costs

The first tip, always, about credit cards isn't actually about credit cards at all. It's about organisation and cutting costs.

29% of respondents to the Aviva survey said that they’d borrowed to pay for an essential purchase and 20% said that they'd had to borrow to meet family obligations.

Credit cards are intended as a form of short-term borrowing and, as such, they could be ideal for covering unavoidable expenses like these.

However, over longer periods the costs of credit card borrowing becomes prohibitive and the debt can start to snowball. At that point it's well worth cutting costs ruthlessly elsewhere and making paying back the debt a priority.

In the end, there's nothing like a little organisation. In the Aviva survey, 10% gave poor money management as a reason for their credit card debts.

Many banks, like Lloyds TSB, and some independent companies now offer money management sites which track accounts and translate finances into easy-to-view forms like pie charts and graphs. Being money-muddled is no longer an excuse.

0% balance transfer credit cards

There's another way to cut the cost of credit card debts, however.

0% balance transfer credit cards take on debts and allow holders to pay back interest-free within an introductory period of a number of months.

It's worth credit card providers' while to offer these deals because some cardholders won't pay the whole debt back with the 0% period. Don't let that be you!

Starting to pay interest on the debt again could eliminate the good done by moving the debt altogether within just a few months. Budget before you buy.

Note that, as of a few years ago, it's near impossible to find a 0% balance transfer deal that doesn't charge a fee for moving money to the card. Usually, that fee is around 3% of the transferred amount.

Finally, let's get off debt for a moment

Over 50s, perhaps more than many other groups, are in a position to reap rewards from credit cards: they're far more likely to have the long credit histories and stability that the providers with the best deals are looking for.

There are a number of cashback and points-style reward schemes available as well as sneakier ways of earning cash.

For example, some people use a super balance transfer credit card (a card with a 0% deal on transfers to current accounts) to move the credit card provider's money to a high-interest savings account.

Before the 0% period is up they pay back the credit card and pocket the interest from their savings.

That's one for the super money savvy only but that'll mean many over-50s with years of personal finance experience behind them.

By Julia Kukiewicz

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Julia Kukiewicz is editor of Choose.net. The site providers news and reviews to help consumers choose credit card deals - including 0% balance transfer offers, as well as purchase rates and rewards.