Credit Cards for Seniors

Seniors (those at or over the age of 65) make up 13.3 percent of the population, according to the U.S. Census Bureau. For most seniors going into retirement, paying off credit card debt is often an important goal.

Why a Credit Card?

Your first question, then, might be – “Do I need a credit card in the first place?” Bankrate.com acknowledges that many retirees also want to retire their credit cards and avoid even the chance of going into debt in their golden years.

Unfortunately, in today’s society, not every transaction lends itself to cash or check. Buying online – for example – requires the ability to make an electronic payment.

In addition, many credit cards offer rewards – often in the form of cash back. This is like a discount on your purchases. Most cards also come with purchase protection – a big plus, especially for a big purchase.

Therefore, for most people, having one or two credit cards in retirement makes sense.

Right Card vs. Wrong Card

The notion of not carrying a balance on your credit card, especially in retirement, is reinforced by a report from the Social Security Administration that indicates the average retiree receives about $1260 per month in Social Security benefits. While that is often supplemented by a pension or other retirement savings for many people, the fact is this modest income means credit card usage needs to be tightly controlled.

Not all credit cards are alike. In addition, not all features that come with credit cards are appropriate for seniors. If you do carry a balance, for example, avoiding high interest rates – no matter the rewards or perks – should be a priority.

Avoid Hype

When choosing a credit card, pay attention to hype and catch phrases. Using a credit card involves taking out a loan – for a few days or for a longer period. Goal number one is to pay back the amount borrowed and no more. After that, the goal is to pay the least amount of interest possible.

Such things as teaser (or promotional) interest rates can be misleading. They are only in effect for a short while, so it’s important to look beyond the promotion to the rate that will be in effect after the promotional period.

Account Management

If checking account balances or paying bills online is not your style, stay away from credit cards that require you to manage them via the Internet.

There are cards that include monthly paper statements that come in the mail and toll free phone numbers for account management. Be careful, however that the personal attention doesn’t come with a fee.

Customer Service

If you plan to conduct most of your credit card business over the phone, check out customer service ratings for cards in which you are interested. Fast, friendly, helpful service is what you are after – not endless voice mail loops and hang-ups.

Look online for customer reviews and comments. A large number of negative reviews and comments should be a red flag. As with account management, some companies charge a fee to speak to a representative, so make sure the card you choose is fee free.

What’s Best for You?

Only you know you. You know whether you will likely be able to pay off your credit card each month, or if you are probably going to carry a balance. You know whether you would take advantage of a cash rewards program or whether travel miles make sense for you.

Credit card comparison sites like Cardhub.com provide information about tailoring your credit card selection to your traits and habits. A comparison site is a good place to start when searching for a new or replacement card.

The aforementioned, Bankrate.com also has a credit card selection tool with a number of unique features including information on the level of credit required to qualify for each card.

One word of caution: Time magazine conducted a study on credit card comparison websites. According to Time, many of these sites rely on affiliate marketing. That means when you click on a link and apply for a card recommended by the site, the site gets a fee. This could create a conflict of interest issue.

Final Tips

It’s best to ignore (throw away) credit card offers that arrive in your mailbox. Searching online through one of the credit card comparison sites like those listed above will yield cards with better terms than unsolicited offers that arrive in the mail.

Finally, before applying for a credit card, obtain a personal credit report, search out, and resolve any discrepancies. Credit Karma is a highly rated site that provides a variety of credit-related services, all free.