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The Best Credit Cards for Retirement

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Retirement is a significant milestone in life; and it’s essential to be prepared for the exciting time of your golden years. One way of doing so is by making sure you’re financially prepared, and a great way to start preparing is to get yourself a sound credit card.

While most credit cards will target a younger age group, luckily, many credit cards offer special incentives for retirees. Since choosing a credit card can be daunting, I’ll examine the best credit cards for retirement!

Why should you get a credit card for retirement?

If you don’t have a credit card and you’re about to retire, consider getting one as soon as possible. Credit cards offer a convenient and straightforward way to purchase products and services without having to carry cash.

Not carrying around money is particularly convenient for seniors since they can sometimes be prone to losing cash.

Also, carrying cash around makes seniors the perfect target for robbers, thieves, and bag-snatchers.

But there’s also a more important reason to have a credit card when you reach old age. Most credit cards today reward you for your spending in different ways. For example, cards nowadays allow you to earn points, miles, benefits, and cashback that you can use to pay for purchases or redeem in various ways — including travel.

Having a credit card helps you save and do more with your money. When you no longer have a steady paycheck, making the most of the money you have is a top priority.

If I have a credit card, why do I need a new one for retirement?

There’s a simple reason why you need to consider getting a new card for when you retire. Some of the perks of the best credit cards have an age limit. That means that you won’t be able to enjoy them anymore after you turn 60 or 65.

One typical example of this is the travel medical insurance that comes embedded in many major credit cards. Unfortunately, odds are your current card’s insurance, if it offers any, doesn’t cover seniors. So, if you want to continue enjoying credit card travel insurance during retirement, you’ll need to switch cards.

Another reason why you’ll probably want to change your credit cards is that we tend to change our spending habits and preferred payment methods once we retire. Unfortunately, this means that you probably won’t be taking as much advantage of your favorite rewards as you used to. That is why you should consider new options better suited for your new lifestyle.

It’s also worth pointing out that specific categories of cards are better suited to certain lifestyles.

For example, many business credit cards offer higher earn rates than personal cards, and cashback cards tend to have lower reward rates than travel cards.

You want a higher rate of cashback perk — and this is why choosing your card strategically is essential; if you select a card from a category that doesn’t match your lifestyle as a retiree, you’ll be swimming upstream.

What are the best credit cards for retirement?

Now that you know why you need a solid card for retirement, here are my top recommendations for credit cards custom-tailored to seniors.

The best card for road tripping during retirement: Barclays’ AARP® Essential Rewards Mastercard®

The AARP Essential Rewards Mastercard is a card designed for seniors. It’s a cashback card that offers:

  • 3% cashback on gas stations
  • 3% cashback on drugstore purchases (not including Target or Walmart).
  • 2% on medical bills.
  • 1% on everything else.

The second and third items are significant sources of spending during retirement. Getting 3% back on gas means that this is an excellent choice for that cross-country road trip or scenic drive.

The best part about it is that it doesn’t carry an annual fee, so you’re getting access to a very decent rewards program, custom-tailored to seniors, free of charge.

Besides cashback, you can use your rewards to pay for your AARP membership which, among other things, grants you senior discounts on all round-trip economy and business-class flights with British Airways.

Other airways are beginning to follow this pattern, making paying the AARP membership a good deal, even if you only fly once every three years.

The best travel card for retirement: Capital One Venture Rewards Credit Card

The Capital One Venture Rewards Credit Card is as simple as travel cards get, which is all the better for your average retiree. It’s a flat-rate rewards card that gives you 2 miles per $1 spent on any purchase, and it doesn’t have a spending cap. With each mile valued at around 1.3 cents, that works out to 2.6 percent back on every purchase you make.

There’s no complicated category system, no need to stick to any particular brand, hotel chain, or airline. Also, you won’t have to worry about whether or not it makes sense to pay for something with your card because it always will.

It does have an annual fee of $95. However, it’s easily offset by an annual $100 credit to fast-track your security check at the airport with Global Entry or TSA PreCheck. Additionally, it has a very generous welcome bonus of 60,000 miles worth almost $800.

Add in travel benefits like travel accident insurance, no foreign transaction fees, and auto rental collision damage waiver, and you’re laughing.

The best premium travel card for retirement: Chase Sapphire Reserve®

While the Capital One Venture Rewards is my pick for the best all-around travel card for retirement, it won’t cut if you’re looking for exclusivity and pampering during your trip.

If you’re the type of person who enjoys relaxing in a lounge before your flight, getting a massage, taking a nap and some refreshments, as well as being treated like a VIP, then you should consider the Chase Sapphire Reserve.

This card’s most important perks and features include:

  • $300 Annual Travel Credit.
  • $100 Global Entry or TSA Pre✓® fee credit.
  • Complimentary Priority Pass™ Select membership for airport lounge access.
  • Unique benefits at any hotel in the Luxury Hotel & Resort Collection.
  • 24/7 access to Customer Service Specialists.
  • Comprehensive travel insurance.

The biggest drawback is the hefty $550 annual fee. Still, the Priority Pass membership, the $300 annual travel credit, and the $100 Global Entry or TSA Precheck credit help offset the fee almost entirely.

[Related: How many Credit Cards should I have?]

Best for debt consolidation during retirement: U.S. Bank Visa® Platinum Card

Keeping your finances healthy is more important than ever during retirement. You will want to lower your debt as much as possible. Considering that many Americans retire with a balance on their credit cards, it’s a good idea to start paying off that debt as soon as possible so you don’t burn your money on high interests.

A great way to do this is to consolidate all your credit card debt by transferring all balances to a new credit card with a 0% intro APR on balance transfers.

Many cards offer this feature, but the best overall is the U.S. Bank Visa® Platinum Card, which provides the most extended grace period of all (20 months), and comes without an annual fee.

Seniors who have a hefty medical bill they paid with a loan or credit card will benefit from applying to this card, provided they can pay it off in 20 months or less before the APR kicks in.

The only downside to this card is that it doesn’t have a rewards program, so you’ll do better to combine it with another card to take care of your spending.

The bottom line

Even when you retire, you need to make sure to keep your finances on track.

Credit cards can be a smart way to keep your finances on track, either by helping you save on your most common purchases. In addition, you’ll be given a hand to enjoy traveling the way you deserve or by allowing you to consolidate bad debt in one single place and avoid paying interests for a prolonged period.

It’s important to prepare financially before retiring, so think about applying for one of these types of credit cards today.

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