Best Credit Cards for Retirees

Article summary

• Choose a credit card that fits your new lifestyle. Retirees should look for cards that offer low annual fees, travel benefits, cash back rewards and fraud protection, as the right card can help you get more out of your retirement spending.
• Plan your retirement finances carefully. Experts recommend having assets totaling between 7.5 and 13 times your pre-retirement gross income before leaving the workforce, though your ideal savings will depend on your retirement age, income streams and planned lifestyle.
• Use your card to make the most of its benefits. Many credit card perks—like travel insurance, sign-up bonuses and cash back—are only valuable if you actively use the card, so pick one that aligns with how you actually plan to spend your time and money in retirement.

If you’re getting ready to retire, you’ve probably spent lots of time thinking about what you’ll be doing in your golden years. Maybe you plan to enjoy travel or pursue active hobbies. Early in your retirement (when you’re still in good shape) is typically the best time to try physically demanding activities. Of course, you’ll want to review your finances—things like savings, income and everyday spending—to confirm you can afford a long and satisfying retirement doing exactly what you want.

Without a traditional salary, you’ll need to adjust spending habits to fit your new lifestyle. You might even choose to adjust your AAA Membership level, upgrading to give yourself access to more valuable benefits you’ll use or saving money by dropping the ones you no longer need. It’s also a good time to streamline finances, like reducing the number of credit cards you have and switching to one with valuable benefits you’ll actually use. This article will review the features that make the best credit cards for retirees so you can select the card that best fits your financial plans in retirement.

Valuable credit card benefits

Whether you’ll be using your credit card once you’re retired for the same types of things you use it on now, or you plan big changes in spending for your future years, there are a variety of credit card benefits that will align with your retirement plans. Here are some of the more popular perks that credit card companies use to reward their retirement-age customers. Depending on your post-retirement plans, some of these features may be more valuable to you than others.

• Low annual fees – Having low or no annual fees is ideal. Some credit cards with useful perks might also carry an annual fee; just make sure the benefits or savings are worth those fees you’ll be paying.
• Travel benefits – As a retiree, you’ll have more time for things like travel. The best travel credit card is likely to be the one that aligns with your existing travel plans. Look for generous cash back percentages on all travel purchases, travel club memberships and travel insurance. Some travel cards might offer assistance and emergency services while you’re away from home. Depending on your intended travel destinations and purchase habits, you may want a card that has no foreign transaction fees.
• Cash back – Credit cards often have different reward levels for different purchase categories. The actual amount you get from cash back credit cards may be higher on qualifying purchases in a certain category or with a specific brand or partner, or it may offer a higher percentage on everyday spending at grocery stores, gas stations and restaurants. Knowing what your spending habits will be in retirement can help you pick the card that will work the best for you.
• Fraud protection – Don’t fall prey to scammers who target retirees. Some credit cards offer a $0 fraud liability policy to protect you from unauthorized card use, and most cards offer credit-monitoring services to help guard against identity theft.
• Travel insurance coverage – If you do a lot of traveling, it might make sense to protect your travel investment with a card that covers things like trip cancellation and trip interruption, lost luggage and physical injury.
• Sign-up bonuses – Some card companies offer a statement credit (such as $100) for new cardholders who spend a certain amount (typically $1,000) on their card in the first 90 days of account opening.

Money in the bank

No two individuals leave the workforce with the same circumstances or retirement goals, but there are some guidelines to observe. Investment management firm T. Rowe Price recommends that people who want to retire at age 65 have assets totaling between 7½ and 13 times their pre-retirement gross income. Your ideal savings amount will depend on the age you plan to retire, the streams of income you have (including things like a pension or social security benefits) and, of course, the way you plan to spend your retirement (such as if you’ll need more funds for lots of travel or less because you plan to downsize).

This is where your credit card and its benefits come in. Choosing a card that caters to your plans can help you keep more money in the bank. The benefits of selecting the right card can include cash back, delayed spending, budgeting help, earning miles for trips and more.

Enjoy your retirement

Whether you’ve just recently retired or will be retiring soon, you’ve got a lot to look forward to, and the right credit card can support the way you choose to spend your retirement years. Get one that won’t stay tucked away in your wallet, because ultimately, many of the benefits you’ll earn are dependent on you actually using the card.