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More seniors willing to amass credit card debt

By Claire Hughes

New York Times News Service

Helen Quirini, like many people who lived through the Great Depression, is loathe to live beyond her means.

But the 82-year-old resident of Rotterdam, N.Y., also exhibits an attitude about money that has become increasingly common among seniors -- one that embraces some debt.

"I use the credit card," Quirini said. "But I know, from my income, how much I can afford to use every month."

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A growing number of seniors are living with debt, and the debt they are carrying is bigger than ever. In 2000, 59 percent of households headed by people 65 or older had outstanding debt, with the average debt among that group totaling $23,000, according to SRI Consulting Business Intelligence, a research firm in Princeton, N.J. That's up from 35 percent of households in that category with debt in 1992, and an average debt of $8,000.

The total average debt figure includes debt from credit cards, home and car loans, and margin accounts from brokerage firms. The average credit card balance carried by seniors also rose, from $1,280 in 1992 to $1,897 in 2000 -- a 48 percent increase.

The majority of older people with debt are like Quirini: They are seniors who, unlike the generation before them, have grown accustomed to using loans and credit to manage their finances, experts say.

But there also are people in their 70s and 80s struggling to make ends meet, as their fixed incomes are outpaced by escalating prices for medicine and food. Financial consultants who work with seniors and bankruptcy attorneys say they are seeing more older people than ever get into trouble with debt.

Marty Gordon, a branch manager of the Consumer Credit Counseling Service of Central New York in Syracuse, has seen growing numbers of seniors spending up to half their income on credit card balances. Others have senior clients who have had to go back to work in order to pay off what they owe. The counseling service is a nonprofit organization that helps people reorganize their finances and pay off debt.

"It's not uncommon for me to see people 75 years and older working part time just so they can service their debt," said Michael O'Connor of O'Connor, O'Connor, Mayberger &; First P.C. in the Albany suburb of Colonie. O'Connor is a bankruptcy attorney for 24 years who has noticed a recent trend among seniors looking to clear or reorganize their debt.

"Wal-Mart seems to be a place where my elderly clients are working," he said.

The causes for increased senior debt are numerous, experts say.

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Americans of all ages have taken on more debt in the last decade or two, and seniors are part of that trend. Seniors also are living longer, and having to stretch their pensions and Social Security payments further.

And some seniors who have used credit cards throughout their adult lives are not averse to using someone else's money to buy things. That is one reason younger groups of seniors are more likely to take on debt, said Clare Hushbeck of AARP.

Gordon said seniors today "are being bolder" and are using credit cards more often. "Before, they said, 'If we don't have the money, we don't buy it."'

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