A goal of many soon-to-be retired people is to pay off all consumer and mortgage debt before they retire, including credit card debt. They continue using credit cards for convenience and safety, but they see wisdom in paying off the credit card balance each month to avoid high interest charges. It makes little sense to pay 16 to 20 percent interest on credit card balances when savings and investment earnings may be much less.

While young families sometimes carry credit card debt that exceeds 15% of household income, this would be unwise for retirees on fixed or declining incomes. If you are faced with credit card balances, shop for the lowest interest rate that meets your credit needs, and consider making adjustments in your routine spending patterns. As with all households when debt becomes a burden, the choices are to increase income or reduce spending.

Federal Consumer Credit Laws Protect Retirees

While credit costs vary significantly from institution to institution, retirees can shop for the best credit deal because the following credit information must be disclosed under the federal Truth in Lending Act:

• amount financed
• total number of payments and their amounts
• a description of any security held by the creditor
• annual percentage rate (APR) expressed as a percentage which reflects all the costs of the loan
• finance charge stated as a dollar amount
• other loan terms and conditions such as date on which payment is due, late payment and prepayment penalties

In addition, the Truth in Lending Act regulates advertising of credit terms, prohibits credit card issuers from sending unrequested cards, limits a cardholder's liability to $50 for unauthorized use of their card, and requires written itemization of the amount borrowed and all charges not included as a part of the finance charge.

All finance companies, stores, banks, credit unions or credit card companies are required to disclose this information so that you can shop around for the best credit deal.

Age Discrimination is Illegal