While children and adult offspring often look to their elders for wisdom, not all seniors are the best source for financial advice. In fact, according to Bankrate.com, credit card debt is growing fastest among seniors.

A recent survey by CESI Debt Solutions in Raleigh, N.C. revealed that nearly 40% of seniors who have accumulated debt in their retirement years are not worried about paying off the debt during their lifetime. The survey also found that 56% of retirees had outstanding debt when they stopped work. Another survey found that bankruptcy filings by seniors age 65 to 74 rose by 178% between 1991 to 2007, even before the recession hit. While digging themselves so deep into debt that bankruptcy becomes necessary represents an extreme level of credit mistakes that retirees make, seniors can make less dangerous mistakes that will still impact their finances. Here are some retirees credit mistakes that you should avoid. (To learn more, see Boomer Bankruptcy Strains Retirement.)

IN PICTURES: 5 Tax(ing) Retirement Mistakes

1. Using Credit Cards to Supplement Income
Living without a credit card at all can be difficult, since credit cards simplify online purchases and travel. The most responsible use of credit cards is to pay the balance in full each month. But seniors tend to use credit for everyday expenses in order to supplement their fixed income, which can lead them into further financial trouble if they cannot make their credit card payments. The CESI survey found that 75% of seniors incurred debt for medical or funeral expenses.

2. Not Choosing the Right Credit Card
Seniors who decide they need at least one credit card should carefully consider how they will use the card before applying. If you have credit card debt now and want to pay it off, apply for a balance transfer card. But be careful. Some seniors have reduced the value of their transfer by paying a high fee for the transfer which just adds to the debt. Others have found that the introductory period is too short for them to pay the debt in full, so they end up paying an even higher interest rate after the intro rate ends.

If you know you will need to carry a balance in order to repay your current debt or anticipated spending, consider a low interest rate credit card. Some seniors have been burned by cards with a short-term low interest rate followed by a high interest rate, so be sure to read the fine print and know how long the rate will last. Also, try to avoid paying an annual fee. Seniors on a fixed-income can be wasting money on annual fees for credit cards, particularly if they carry more than one credit card. (For more, see Shuffle Away Your Debt With Balance Transfers.)

IN PICTURES: 6 Ways To Ruin Your Retirement

3. Picking a Card for Its Rewards
If your finances are healthy and you want a credit card to earn rewards, make sure you read the details about how the rewards program works. Some seniors have been frustrated by rewards programs with caps that prevent them from earning enough points to actually reserve a hotel room or take a trip. Compare credit cards to see how much you will need to spend to earn rewards and how many points you will earn for each dollar spent. There can be a wide range of rewards from card to card.

Make sure the rewards program fits your needs. If you want to travel, choose a card that provides the fastest travel rewards. Some seniors would rather earn and use rewards for day-to-day expenses such as gas and groceries, so look for a card that focuses on those rewards or even a cash-back reward card.

4. Allowing Your Credit Score to Slip
The best credit card offers go seniors with the highest credit score, so one of the worst things seniors can do is to pay their bills late or get too deep into credit card debt. AARP says that credit card companies are offering better rewards to consumers with excellent credit and who use credit cards regularly and responsibly. Accelerated rewards programs, no-fee cards, low interest rates and even complimentary airline tickets are available to seniors with stellar credit. Seniors with a poor credit score may find themselves unable to qualify for any credit card and may have to use a secured credit card that requires a deposit and sometimes an activation fee. These cards usually have a low credit limit.

5. Co-signing a Loan
Many seniors are naturally inclined to help their adult offspring buy a home or pay for college, but if the loan goes into default they will be responsible for the debt and their credit score could be ruined. (For tips on dealing with such an issue, check out Getting Your Name Off A Cosigned Loan.)

6. Not Making a Debt Plan
While retiring debt-free is a worthy goal, retirees with debt need to make sure they have a plan for themselves and their heirs. Understand that retirement income such as a pension, 401(k), IRA and Social Security cannot be accessed by creditors. Make sure surviving family members, unless they are co-signers on a loan or credit card, know they are not responsible for your credit card debt after you pass away. The best idea is to have a document that applies to your state to protect assets from creditors.

The Bottom Line
Retirees on a fixed income should carefully evaluate how credit can fit into their overall financial plan. Those who cannot afford their day-to-day expenses may want to avoid taking on additional debt, but should instead consider a new spending and saving plan.

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