Credit card debt is always something that's difficult to deal with. Those evil credit card companies lure you in with low interest rates and then trap you with rate increases and fees. But as a person who is working full-time, it's usually possible to figure out ways to pay back that credit card debt that you accumulate. Unfortunately, the same is not true for the retirement population.
If you enter retirement and still have credit card debt, it's highly unlikely that you are going to be able to ever pay it off. Retirement income is just too limited to allow you to pay off those additional financial burdens. In worst case scenarios, people enter retirement only to discover that they can't even meet their minimum monthly payments. This places a strain on the individual that can ultimately cause stress-related health problems and decrease the aging individual's quality of life.
The reverse home mortgage is an important option to consider for taking care of this problem. You can get a lump sum payment that will allow you to pay off that credit card debt so that you're no longer taxing all of your retirement income on making those payments. You can rest easy knowing that you've used a loan that makes more sense than those high-interest credit cards and that you're taking steps to make sure that the final quarter of your life is going to be stable and secure.
Of course, if you are pre-retirement, you might want to think about other options for paying off those credit cards. Some people may find it beneficial to do some smart financial planning and work for an extra year to pay off those cards in order to prevent the need for using a reverse mortgage to make the payment. This frees up the reverse mortgage for future emergencies or even for some more fun expenses down the line.
Question of the Day: What other loans would you consider paying off with a reverse mortgage loan?
