Suze Orman called the minimum payment on credit card debt in retirement “financial suicide.” It’s a powerful sentence, but the math behind it gets tricky.
Credit cards currently have average annual percentage rates above 20%. The Federal Reserve lowered its benchmark rate to 3.75%, but that cut did almost nothing to lower credit card APRs. The spread between what banks charge on revolving credit and what the Fed charges banks has never been wider. When you’re making only the minimum payment on a $10,000 balance at 22% interest, you’re barely paying off the principal. Most of your payment goes straight to interest.
A 45-year-old working with credit card debt has options: a raise, a side job, a bonus. A retiree has a very limited set of levers to pull on fixed income. Social Security transfer payments totaled $1,578.2 billion in Q4 2025, and are the primary source of income for millions of retirees whose monthly check is their primary source of income. It is not growing fast enough to exceed 22% interest.
The Consumer Price Index increased from 319.785 in March 2025 to 326.588 in January 2026, which means that the purchasing power of this fixed income is quietly decreasing every month. On top of that, taking on high-interest debt creates a two-pronged problem: inflation erodes what you own while interest charges compound what you own.
For a 67-year-old withdrawing $2,200 per month from Social Security with an $8,000 credit card balance at 21% interest, the minimum payments might be $160 to $200 per month. At this rate, the balance can take a decade or more to clear, and the total interest paid can exceed the original balance. Orman’s main point is this: Minimum payments in retirement are not a debt management strategy. They are debt protection strategies.
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The advice is most urgent for retirees who have no more liquid assets and no plan to aggressively pay down principal. Someone with a pension, a paid-off house, and a small credit card balance that they pay off in a year is in a different situation. The risk that Orman describes is that retirees treat minimum payments as routine and indefinite.
Before accepting this model, ask one question: At this level of payment, does the balance actually disappear? If the honest answer is no, the strategy needs to change.
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