Patti's Blog - Advocate for Elders, People with Disabilities and Their Families

Column: Retirees and debt: How to avoid the worst traps

Excerpt from: Reuters (click for full article)

 

If you're strapped for cash or have a poor credit rating, the offer would sound tempting: upfront cash in return for your future pension payments.

But it's a debt trap, according to a recent expose by The New York Times, a "pension advance" loan charging sky-high interest rates. A Times analysis of these deals found effective interest rates ranging from 27 percent to as high as 106 percent.

The companies that market these loans like to target unsuspecting military veterans, teachers, firefighters and police officers.

Pension advances are part of a bigger picture of rising debt burdens carried by a growing number of older Americans in the wake of the Great Recession.

Credit cards pose the most serious threat, with interest rates not much lower than the predatory pension loans - average monthly interest rates ranging from 11 percent to 16 percent, according to Bankrate.com.

The Grave is No Barrier to Identity Thieves

Excerpt from: German Law Group, P.C. (click for full article)

 

If you’ve ever been the victim of identity theft you know how aggravating it can be. Yet, even if you haven’t been victimized by identity thieves you may still have to deal with the problem because a thief has stolen the identity of a deceased relative.

According to a new study about 2 ½ million deceased Americans have their identities stolen every year. When this happens, the former spouses and family members of the deceased person are often left to deal with the mess.

According to financial security firm ID Analytics, identity thieves stole the Social Security numbers of about 1.6 million Americans last year. In another 800,000 instances, criminals used a deceased person’s identity to apply for credit cards, cell phone service, or other lines of credit. This type of identity theft can cause a headache for the deceased person’s family members, but they won’t be responsible for paying back any debt.

This Valentine’s Day, Tell Congress You’d Really Love Access To A Free, Reliable Credit Score

Excerpt from: The Consumerist  (click for full article)

 

Sure, there are those sites that promise you a “free” score, but they generally require you to sign up for at least a short trial of some sort of subscription service.

And even then, that credit score you get from any of the bureaus may be quite different from the ones that lenders use to help decide your creditworthiness, as the ones you can purchase from TransUnion, Equifax, and Experian are dubbed “educational” scores and may not fully reflect the scores seen by lenders.

That’s why our colleagues at Consumers Union’s DefendYourDollars.org have created a letter-writing template that allows you to let your members of the House and Senate know how you feel on the topic.

Credit Card Debt: Study Predicts Millions Will Die In The Red

Excerpt from: Huffington Post (click for full article)

 

Millions of young Americans will die in debt to credit card companies, according to new research from Ohio State.

People in their late 20s and early 30s (born 1980 to 1984) carry significantly higher credit card debt than older generations and pay it off more slowly, the study found. They have about $5,700 more than people born 1950 to 1954, and $8,200 more than those born 1920 to 1924. And they'll continue to charge well into their 70s, the study predicts.

Researchers examined Capitol One credit card data for more than 32,000 people from 1997 to 2009, including borrowers age 18 to 85. The study, which appears in the January issue of the journal Economic Inquiry, was the first to examine both sides of the equation -- how people borrow and how they pay off their cards -- allowing researchers to forecast payoff times.

Feds Charge 18 People With Ringing Up $200 Million In Fraudulent Credit Card Charges

Excerpt from: The Consumerist (click for full article)

 

Here’s how the alleged thieves are said to have worked their con: First, just create thousands of fake identities. About 25,000 fake people should do. Then make a bunch of small purchases here and there, nothing splashy, to build up good credit card histories for these characters. And then go hog-wild buying luxury cars, electronics, spa treatments and millions of dollars worth of straight-up gold. Sounds so simple.

And $200 million is just the initial number — feds say the fraud is so wide-spread, it’s hard to know if the losses will grow.

Older Americans carry more credit card debt

Excerpt from: USA Today (click for full article)

 

Older Americans rely on credit cards as their financial safety net and pay down less of their debt than younger consumers, a new study shows.

Last year, the low- and middle-income 50-plus population had an average credit card balance of $8,278, compared with the younger generation's balance of $6,258, according to research conducted by Demos, a liberal public policy organization on behalf of AARP.

The older generation managed to reduce their balances by 16% from 2008 to 2012. But the under-50 age group surpassed that, paying off 37% of their credit card debt in the same period.

"Older Americans living on a reduced income and feeling strapped for money will likely turn to credit cards as a way to make ends meet," says Gail Cunningham,vice president of the National Foundation for Credit Counseling (NFCC). "Credit should be used as a convenience, not as an additional paycheck."