Many seniors who have adequate retirement plans choose to discontinue use of their credit cards once they reach retirement age. While this is certainly an option, however, and might make sense in your current financial situation, you don’t want to wind up without any credit options ten years down the road.
Credit cards for seniors are just as important as credit cards for younger citizens because they provide financial stability while serving to keep one’s credit file active and healthy. If you cut up all of your credit cards, there won’t be any reports on your credit history, which will make it difficult to get credit in the future.
The senior friendly cards are those that fulfill a specific purpose based on an individual’s credit history and current situation. For example, if you have a large amount of credit card debt, a card that allows you to pay it off with a low interest rate might be in your best interests. On the other hand, if you pay off your credit cards in full each month, a rewards credit card would benefit you.
The largest credit card pitfall among seniors is to use credit cards to fill the void left when a salary becomes a retirement fund. The temptation to use credit to maintain one’s lifestyle is strong, and this is where seniors get themselves into trouble. Instead of using credit cards as a means to fulfill your every whim and fancy, use them to maintain a positive credit rating. Charge only within your means to pay back and don’t carry a balance when it isn’t absolutely necessary.
Credit Cards for Seniors Who Carry a Balance
If you find that you are more likely to carry a balance on your credit card, it’s best to choose a card with a low interest rate and low penalties for late payments. The Pulaski Bank & Trust MasterCard, for example, has an interest rate of just 7.99% and no cash advance fee, which makes it flexible and affordable. The downside to this credit card is the $35/month annual fee, but it makes up for this drawback with low interest rates.
You might also want to check out Blue from American Express, which has no annual fee and a 14.24% variable interest rate. If you continue to pay your bills on time, you can negotiate a lower APR, and the late fee is only $35. Blue Cash from American Express has similar terms, but with a 15.24% APR and a cash-back rewards program.
Credit Cards for Seniors Who Don’t Carry a Balance
If, on the other hand, you are in a position to pay off your credit card balances each month, your credit card options change. You’ll want to look for credit cards with rewards programs, low balance transfer APRs and long grace periods, such as Clear from American Express. This card has no balance transfer or over-limit fees and begins with a 0% interest rate. It also comes with a built-in reward program.
Another great option is the Capital One No Hassle Premium Cash Rewards card. This credit card is perfect for seniors who enjoy receiving cash back from their purchases. If you use your card to buy everyday items such as groceries, gas, prescription medications and restaurant meals, you earn 1% cash back. You also get an additional 25% cash bonus every year on the rewards you’ve earned so far.
And for those of you older Americans who love to travel, the Hilton HHonors Platinum card can earn you points toward nights in Hilton hotels as well as additional points for nights you spend in hotels and pay with the credit cards. If you’d rather have airline miles, you might want to check out the Miles Discover Card, which gets you one mile for every dollar you spend, with double miles when you use your card to purchase airline tickets and restaurant meals.
The bottom line is that credit cards no matter what your age group can not only be a strong financial decision, but also a way to save money on purchases.