When retirement is 19 credit cards and $40,000 in debt away

Sitting outside every morning with a fresh cup of coffee or reading a book in the front yard at night: it's the simple pleasures that matter to Susan Cannon.

Lately, sky-high interest rates on the 73-year-old's credit cards have cast a dark shadow.

"I can't get the balance down because I am still having to use credit cards at the end of the month to get groceries and gas," Cannon, who lives in a mobile home in rural Texas, told Business Insider. "I pay my bills, but because of the interest rates, it keeps going up. I feel like I'm being gouged."

Cannon has $39,440 in credit-card debt spread across 19 cards with varying interest rates, from 12.15% to 34.99%. The issue began to spiral when the pandemic hit — she lost her part-time job as a mystery shopper, which she had held since retiring from her full-time job as a medical coder in 2015.

Since then, she has relied on minimal COVID relief funds, her Social Security, and her pension. Credit cards have helped her stay afloat, using them for gas, groceries, and home repairs. While she paid at least $25 more than the minimum monthly payment, the interest rates prevented her from making a dent in her balance.

The only way she believes she can pay off her balance is through lower interest rates. Capping rates is supported by both Democratic and Republican lawmakers, and even President Donald Trump — he recently proposed a 10% cap on credit card interest rates, a proposal pushed by lawmakers like Sen. Bernie Sanders.

Companies and leaders in the financial world have said that capping rates would ultimately have a negative impact on consumers because banks may limit their offerings, driving more people to riskier sources of credit.

Credit card debt in the US is at a record high. Inflation and high living costs are pushing consumers to turn to credit cards to stay afloat in the short term, while high interest rates drag them down in the long term.

Economic conditions play a significant role in high credit-card balances, Adam Rust, the director of financial services at the Consumer Federation of America, told Business Insider.

"Wages aren't growing as quickly as the cost of living. People are struggling to get by," Rust said. "They use their credit card when they're having a tough time making ends meet, and repeated across tens of millions of households, the result is a surge in credit card debt."

Cannon said that Trump's proposal to cap rates would make a huge difference for her. Since her divorce in the 80s, she has worked multiple jobs at once, including working for Coca-Cola during the day while cleaning office buildings at night. She later worked in accounting full-time and, on weekends, handed out samples at grocery stores until her retirement. She now works part-time as a mystery shopper, earning about $400 to $500 a week, and has cut back her hours to preserve her health. Even if she looked for more work, it wouldn't be easy; US employers are hiring at one of the lowest rates since 2013.

She's spent her life working to pay her bills, but she couldn't prepare for the pandemic and the financial and emotional toll it would take, and she doesn't see an end in sight unless interest rates go down.

"Am I going to keep working like this, or am I going to be able to sit down and at least just sit outside and read a book in the evening?" Cannon added, saying that she lives minimally, doesn't buy new clothes, has no TV subscriptions, and keeps just a prepaid phone, "but I don't know what more I can do."

'It's all going toward interest'

Cannon started signing up for credit cards about 15 years ago, believing that paying off more cards would boost her credit score. Her strategy worked for a while — she said that she would apply for a credit card, pay off the balance, set it aside, and her score would go up.

While the cards with the highest interest rates were store credit cards that offer discounts on certain purchases, Cannon said she made sure to use them sparingly. She did not anticipate losing a third of her income once the pandemic hit. Credit cards turned from a way to boost her credit score to a means of survival.

"With this cold, my electric bill last month was $200, and I'm expecting to get hit with about a $300 bill, I believe, for next month," Cannon said, adding that maintaining her home and land has added to her debt.

Still, many people use credit cards for reasons beyond making ends meet. For example, travel rewards can motivate people to purchase vacations and other travel expenses on their cards. A 2024 Bankrate survey said that respondents reported high credit card usage for medical costs, too much discretionary spending, and home renovations. A 2025 AARP report found that credit card debt is the most common type of debt among Americans aged 50 and older, with cardholders using them for everyday expenses and housing costs.

"I've always tried to put some in savings, but it's gotten to where it's all going toward interest," Cannon said. "I just cannot get ahead."

She's tried to contact some of her banks to lower her interest rates, to no avail. Cannon most recently received a denial letter in the mail from CitiBank — where she has a 28.49% interest rate — which said its decision "was based, in whole or in part," on information from her credit reporting agency.

"Based on your credit score, your current APR is equal to or lower than the APR we offer consumers with the same credit score who apply for the same or a similar credit card product today," the letter said.

Interest rates on credit cards have steadily climbed over the past decade. The average rate stands at nearly 23% annually, according to the New York Federal Reserve, up from about 12% a decade prior. Rust said that credit card companies, and especially those that manage store cards with the highest interest rates, are "incredible profit machines" that are savvy at pulling consumers in for specific products.

"Those cards benefit from having a consumer who's captive to using that card in that store to get that deal," Rust said. "And so perhaps it's not surprising that interest rates are frequently higher as a result."

The motivation for companies to charge high interest rates could go beyond profit, an analysis from the New York Federal Reserve said. The rates could offset losses when a customer defaults, the analysis said, along with operating expenses, such as marketing costs, that might be built into the interest rate.

"You might say, 'Why don't they just give them a lower rate, and then they won't need the marketing because people will come for the lower rate?' But people don't come for the lower rate. They respond to the marketing," Itamar Drechsler, one of the authors on the analysis, told Business Insider.

For example, consumers might be pulled in by a limited-time low APR or certain rewards or points, without considering that the promotion is temporary and whether they can afford a higher rate down the road.

Cannon ensures she makes at least the minimum monthly payment on all her cards so she doesn't fall too far behind. She uses her Social Security check to cover about half of her bills, and at the end of each month, she finds herself transferring some money from her savings account into her checking account to cover the remainder of her expenses — leaving her with just enough to pay slightly more than those minimum credit card payments, but nothing extra.

"I have tried to keep up with these credit cards, and I still am," Cannon said. "I feel like a fool, but at the same time, I wouldn't be in this situation if they hadn't raised those interest rates."

Tackling the credit card problem

Credit card interest rates are a rare issue that has garnered bipartisan agreement. The 2009 CARD Act required companies to notify customers of interest rate increases at least 45 days in advance and placed restrictions on actions such as late fees and withdrawal fees. However, the legislation didn't cap interest rates or rate increases.

That's why there's been a renewed push to cap interest rates. Trump called for a one-year, 10% cap on rates in early January, saying in a Truth Social post that he would "no longer let the American Public be 'ripped off' by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more."

More recently, over 55 organizations, including the Consumer Federation of America and the NAACP, called on House and Senate lawmakers to pass bipartisan legislation that would cap credit card interest rates at 10% for 5 years. Research from Vanderbilt University found that the proposal could save $100 billion a year.

Credit card companies have pushed back on the proposed caps. A coalition of banking groups said in a joint statement in response to Trump's proposal that a 10% cap "would reduce credit availability and be devastating for millions of American families and small business owners who rely on and value their credit cards, the very consumers this proposal intends to help. If enacted, this cap would only drive consumers toward less regulated, more costly alternatives."

Jamie Dimon, JPMorgan's CEO, said on a recent earnings call that capping credit card rates could limit access to credit for customers with lower credit scores.

Those more costly alternatives include payday loans, which tend to charge high interest rates and fees that can be a lot more difficult for consumers to escape than credit cards, Rust said. SoFi's CEO, Anthony Noto, said his company is prepared to extend personal loans to consumers, should a credit-card cap be implemented.

"Relying on credit cards is expensive, but it's important not to forget that they still come with protections," Rust said. "They still cost less than a payday lender. It's still easier to resolve a problem with your credit card company than with a buy now, pay later company."

Cannon makes up just a sliver of the $1.28 trillion in credit card debt in the US, and she said that she recognizes that other people have it worse than her. It doesn't make her situation less painful. She physically cannot work multiple jobs, and if she put all of her money toward her credit cards, she wouldn't be able to maintain her property and afford her basic needs.

"I never thought I would be in this position," Cannon said. "I'm just surviving."