Boomers’ biggest debt struggles in 2026

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The average American with a personal loan now owes $21,700, according to a new Northwestern Mutual Studies. But how that debt is distributed varies between generations.

Among indebted Boomers, credit card debt is most common (29%), followed by auto loans (11%) and medical bills (5%). While each presents different risks, high interest rates cause credit card balances to cause the most long-term damage — which is why experts say they deserve special attention.

Here’s a closer look at why credit card debt is so common among this generation, how they can deal with it, and how to balance paying off credit card debt and other types of debt.

Why is credit card debt so common among boomers?

According to Dexter T. Wyckoff, director of growth and development and financial advisor for Northwestern Mutual, nearly 1 in 3 boomers have credit card debt — and there are several reasons for that.

• High APR and Missed Fine Print: “Carrying balances exposes consumers to interest and penalties that make it harder to pay off.”
• Blind Spots of Facility and Budgeting: “Easy card use and unclear budgeting cause small overspending to accumulate in revolving balances.”
• Inflation and cost pressures: “Americans rate inflation as the biggest obstacle to financial security, and Boomers are particularly pessimistic about rising inflation. Rising prices can make it harder for people to manage debt, especially those on fixed incomes.”
• Insufficient emergency buffers: “More than half (52%) of adults admit they prioritize building wealth rather than protecting assets, leaving gaps that turn one-time emergencies into credit card debt.”
• Alternative Payment Plans and Complexity: “The widespread use of buy now, pay later and multiple payment plans complicate tracking and repayment.”

Considered together, these factors explain why many Boomers still carry credit card balances.

How Boomers Can Pay Off Credit Card Debt in 2026

According to the Boston Fed, only 35% of Americans pay their credit card bills in full each month. However, there are several ways to break this cycle and get out of credit card debt.

Here’s what Wyckoff recommends.

• Keep spending disciplined: “Relook at your budget and stop impulse buying.”
• Create a financial safety net: “Build a one-month emergency fund. Studies show that many Americans place less emphasis on asset protection, so a surprise expense often turns out to be credit card debt.” Make minimum payments until the safety net is established, then put extra cash toward the loan.
• Negotiate rates or consider a balance transfer card: “The average card APR is high, so lowering rates or going to a 0% promo can reduce interest costs significantly — but promos are temporary and may have fees.”
• Choose loan repayment method: If you need quick wins to stay motivated use the avalanche method (deal with the cards with the highest APR first) or switch to snowball (start with the lowest balance first). “Avalanche reduces total interest payments; snowball builds momentum.”
• Avoid stacking up on new payment plans: Buy now, pay later while paying off the balance and avoid things like multiple promos.
• Make payments frequently and automate where possible: “Make payments on time to protect your credit score. Payment history drives 35% of your credit score; making frequent payments reduces interest accumulation and makes course correction easier.”
• Consider professional help: “According to studies, people with a financial advisor feel far more financially secure. Advisors can help with debt repayment, savings, and prioritizing other goals.”

How Boomers Should Prioritize Debt Repayment

Some boomers may be dealing with many types of debt, including credit card debt, auto loans and medical debt. This can seem overwhelming, so it’s important to create a plan that helps you prioritize paying off these debts effectively.

“Make at least the minimum payment on each account,” Wyckoff said. “Set up autopay to avoid late fees.”

Focus any extra funds toward the most urgent debts. Here’s how Wyckoff says to prioritize your loan repayment:

• “Move quickly to bring delinquent or delinquent accounts current – ​​this can help your credit.
• After high-interest balances are eliminated, focus on loans without tax benefits — for example, personal or auto loans — before loans that may offer a tax deduction.
• Mortgages are generally ‘good debt’ and are often last on the list. “Accelerating them is usually not a top priority until rates are high and other loans are paid off.”

Debt Strategies for Retirees Living on a Fixed Income

Many boomers are retired and living on a fixed income, which can make paying off debt more challenging.

“In addition to prioritizing, getting organized, and paying off bad debt, retirees on fixed incomes must also look at their debt and make some additional decisions,” Wyckoff said.

Here’s what retirees should keep in mind:

• It is okay to have some low interest loans: “When deciding which loans to keep and which to repay, it may make sense to have a low-interest loan if repaying it would deplete your emergency savings or if the loan’s interest is tax-deductible – for example, mortgage interest.”
• Carefully consider refinancing or consolidation: “Low fixed-rate personal loans or balance transfers may reduce interest, but factor in fees and whether you can meet promo terms. Refinancing a secured loan – i.e., a home equity loan – is an option, but default risk can put your home in jeopardy, so proceed with caution.”
• Know your liquidity options before you tap them: “Check emergency savings first. If you have a permanent life insurance policy, review its cash value – some policies allow borrowing or withdrawals.”
• Adopt a Conservative Approach: “Avoid steps that could reduce long-term security – for example, depleting an emergency fund or taking on new high-risk borrowing. If you’re unsure, consult a trusted financial advisor before using home equity or retirement funds.”
• Look for modest ways to boost cash flow or reduce expenses: “Reduce discretionary spending and reallocate that money to debt service. If appropriate and feasible, consider taking on part-time or occasionally paid work.”
• Get professional help if necessary: “A financial advisor can help prioritize payments, analyze whether certain debts should be kept, and recommend safe liquidity strategies tailored to your retirement income and goals.”

While dealing with debt in retirement is challenging, it’s possible if you stick to the basics – keep track of each debt, always make the minimum payment, negotiate rates and preserve emergency savings. Use refinancing only after carefully evaluating the costs and risks, and consider consulting a trusted financial advisor to help you consider all of your options.