Manfred Kohl is one of 1.9 million Australians who are struggling with credit card debt.

Key points: The Salvation Army's financial counselling service reports more people aged 55 and older are asking for help

The Salvation Army's financial counselling service reports more people aged 55 and older are asking for help ASIC says 1.9 million Australians have problematic credit card debt

ASIC says 1.9 million Australians have problematic credit card debt Australia has one of the highest levels of household debt in the world

The 59-year-old was forced into debt when his partner fell ill and had to stop working, which halved the family income.

He started using a credit card and took out a personal loan, and now owes $48,000 which he has no capacity to repay.

He is just one of a growing number of elderly Australians finding themselves caught in a credit card debt trap.

"You're not proud anymore," Mr Kohl told 7.30.

Fighting back tears, Mr Kohl described the difficulty of making ends meet.

"I tried everything that we could," he said.

"We stopped eating normal, we cut back on electricity."

Ill health forced Helen Soo to give up work. ( ABC News: Jerry Rickard )

Mr Kohl earns about $800 a week as a maintenance fitter.

He and his partner Helen Soo turn off the lights at 6:00pm every night and go to bed to save on electricity.

They have cold showers, do not turn on the heater, and they use five blankets on their bed to try to stay warm.

Ms Soo, 76, suffers from diabetes and high blood pressure, and her health problems forced her to stop working two years ago.

Mr Kohl cashed in his holiday pay and long service leave. He even asked family to help pay the bills.

But it was not enough to cover their debts.

"I didn't want to get in debt," he said.

"All my life I was never in debt. This was the first time."

He said he has had sleepless nights, worried that he will end up homeless.

Australians struggling with debt

According to the Salvation Army's financial counselling service, Moneycare, older Australians are increasingly asking for help to manage debt.

Ten years ago, 19 per cent of its clients were aged 55 or older. In the 2017/18 financial year, 26 per cent were in that age bracket.

The most common reason people are asking for financial assistance is credit card debt (49 per cent), followed by personal loans (30 per cent) and electricity debt (25 per cent).

Gerard Brody from the Consumer Action Law Centre said credit card debt was the number one reason people called the National Debt Helpline.

"Australia has one of the highest levels of household debt in the world," he told 7.30.

"1.9 million Australians have problematic credit card debt according to the Australian Securities and Investments Commission. That's almost 15 per cent of Australian adults."

Older Australians falling in to debt trap

Financial counsellor Isis Khalil says it is important to pay off credit cards in full. ( ABC News )

Mr Kohl's financial counsellor is Isis Khalil. She works with Mission Australia and said many of her older clients had experienced an illness, marriage separation or lost their job, which meant their once-manageable debts quickly got out of control.

"When something happens the first thing that they start doing, rather than paying out their credit card every month like they used to, is pay the minimum amount," she told 7.30.

"It very quickly compounds and before they know it, they've got the maximum amount on their credit card met.

"And it's when they get close to that limit is when they start calling and saying, 'I need help'."

'If you don't control it, it can control you'



Louie and Nida Tolentino went into debt to fund their travels. ( ABC News: Julia Holman )

Louie Tolentino admits he is addicted to spending on credit card. After 30 years of paying on plastic, he ended up $50,000 in debt.

"It's an expensive and painful experience," he told 7.30.

He said most of the money was spent on overseas trips with his wife Nida. The pair have travelled to more than 30 countries.

"Like my experiences smoking, I should have stopped," he said.

"If you don't control it, it can control you."



Both Mr and Ms Tolentino are still working full time, but the credit card debt means half of Mr Tolentino's income is going to paying the minimum repayment.

Souvenirs from the Tolentinos' trips. ( ABC News: Julia Holman )

"Up to last month, I was able to cover the minimum," he said.

"But then I started getting worried because I know it will go higher where I can no longer afford it."

Mr Tolentino has cut up both his credit cards and says his travel plans are now on hold while he focuses on paying off his debt.

He is working with a financial counsellor from Wesley Mission, who managed to convince one of his banks to waive his credit card debts entirely.

This was due to Mr Tolentino's chronic health problems, which means he needs an oxygen mask to breathe at night and uses an inhaler up to eight times a day.

His other bank has put him on a manageable payment plan, but it will still take six years to pay off the $24,000 credit card debt that remains.

Older people particularly vulnerable

Reverend Keith Garner says banks need to look at the interest rates they charge on credit cards. ( ABC News: Jerry Rickard )

The head of Wesley Mission, Reverend Keith Garner, said more older people were falling into the credit card debt trap.

"If you haven't got a good income it's one way of putting off things," he told 7.30.

"Paying for a bill and hoping by the next time the bill comes along that you're able to tackle things, that's one of the saddest things.

"That's why older people in particular are very vulnerable."

He is calling for more reform of credit cards, pointing to the fact that the cash rate is at a record low of 1 per cent, but it is still common for credit cards to charge interest rates above 20 per cent.

"We've all heard the statements the governor of the Reserve Bank and other people have made about the levels of interest payment, down to 1 per cent now," he said.

"I don't see the same shift going on in terms of credit cards. And I would be saying to the banks following the royal commission, what about coming to the party now and doing something in this area? Not to make taking money on credit cards easier, but certainly making it possible to actually assist people."

Where to get help

The National Debt Helpline is a free and confidential national service that can be reached on 1800 007 007.

It can assist anyone who is in financial stress and refers clients to financial counsellors in their area who they can work with, free of charge, to help with their finances.

Reverend Garner urged people of all ages in financial need to seek help as early as possible.

"Don't be afraid of your situation," he said.

"If you're in debt, seek help."