CASH-STRAPPED ACT seniors are turning to credit cards to pay for medical bills and home repairs and are racking up debts they will never be able to repay, financial experts have warned.
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Financial defaults among over 65-year-olds have increased by 200 per cent in the past decade, according to credit data company Veda.
Retired home owners who had finished paying their mortgages but faced a future of expensive maintenance were particularly vulnerable to financial stress, Canberra-based CARE financial services director Carmel Franklin said.
''Older people on low incomes have found it really hard to cope with increased living costs over the past few years,'' she said.
''They are using credit cards to pay for essential items like electricity bills or medical bills and those are the kinds of things that would not normally attract interest, but once you used a credit card - they do.
''If people can't pay them off at the end of the month they get into a debt spiral.''
Veda consumer risk expert Angus Luffman said there had been both an increased demand among over-65s for credit and an increased level of defaults.
However, younger generations were snubbing credit cards, with the volume of applications reducing significantly in the past four years and most prominently with 18- to 20-year-olds.
''The older generations are saying that they owe more now then they did before the GFC,'' he said.
''The financial defaults are for things including credit cards, mortgages, telecommunications and utilities. There is a high incidence in this age group of defaults for utilities and phone bills - which means they are anywhere between three and six months overdue.''
Ms Franklin said tempting offers to increase credit card limits and complex mobile phone plans were adding to the problem.
The Combined Pensioners and Superannuants Association said many seniors were embarrassed to ask for help.
''A lot of people are too proud to take the assistance measures available to them or are just unaware that they exist, like options to pay bills by instalments,'' a spokeswoman said.