How to choose the best credit card for seniors
With so many credit cards available, it can be hard to know which one you should choose. A good first step is to pin down what you want a new credit card for. This can help you decide on a specific type of card. You can also narrow down your options based on the features and services each card offers.
Here are the most common reasons to open a credit card and which types of credit card you should check out for each one.
If you want to save money on your regular expenses…
For savings on monthly bills, a cash back credit card is an excellent choice that will earn cash rewards on your purchases.
It's a little like getting a discount on purchases just because you're using your credit card. Each cash back card earns a certain rate on purchases, such as 2% back. As you accumulate cash rewards, you can redeem them as a statement credit on your credit card bill or as a deposit to your bank account.
Some cash back cards have bonus categories where they reward you more with a higher rate, such as 6% on groceries and 3% on gas, compared to 1% on regular purchases. Others earn the same rate on all types of purchases. Both can work well, it just depends on your spending habits.
If you want to travel more…
Travel credit cards earn points or miles (the terminology depends on the card) that you can redeem toward travel purchases. Many of them also offer extra perks, such as free checked luggage, access to airport lounges, and free night awards at hotels.
There's a wide variety of travel cards, from no annual fee cards with more basic features to premium credit cards with lots of benefits. If you want to see more of the world or even live abroad in retirement, make sure to get a credit card with no foreign transaction fees.
If you have credit card debt to pay off…
You can spend less on interest and get your credit card debt paid off more quickly with a balance transfer credit card.
These cards offer a 0% intro APR on balance transfers. That means you can transfer a balance from another credit card with a high APR (interest rate) to a balance transfer card with a 0% APR for an introductory period. With top balance transfer cards, the intro period can last for 15 months or longer.
Balance transfer credit cards usually charge a small balance transfer fee, often 3%. If you have debt that will take you six months or longer to pay off, the fee is likely worth it, because you'll save much more on interest.
If you need to rebuild credit…
When you have a low credit score, a secured credit card is a good way to rebuild it.
What makes secured credit cards different is that they require a refundable security deposit from the cardholder upon account opening. The deposit is usually equal to the starting credit limit for the secured card.
Since the card issuer has that security deposit, it can be more flexible about the applicants it approves. Even if your credit score is in the "poor" range, you could still get approved for a secured card and start to rebuild your credit.
Can I open a new credit card if I'm retired?
Yes, you can open a new credit card if you're retired. You need income to get a credit card, but it doesn't need to come from a job. You can also qualify for a card through Social Security benefits, retirement fund distributions, or any other type of income you can access. So, it's possible to get a credit card while unemployed or retired.
There's also no maximum age limit for opening a credit card. In fact, credit card companies aren't allowed to deny applications based on age. It's prohibited by the Equal Credit Opportunity Act.
It's important for retirees to understand how income affects credit card applications. Credit card issuers consider your income, as well as your income in relation to debts and the amount of credit you currently have. If your income has decreased, that can affect whether you qualify for a credit card. And if you already have a large amount of credit from other credit cards, it could be harder to get approved for a new card.
How to apply for a credit card
The fastest way to apply for a credit card is online. Most credit card issuers also let you apply over the phone and by mail. If the card issuer has physical branches, then you can likely apply for a card at those as well.
Here's a quick guide for how to apply for a credit card online:
- Choose the credit you want.
- On the web page for that credit card, click "Apply Now."
- Fill out the application with your personal and financial information.
- Submit the application and wait for a response.
Most card issuers offer instant approval credit cards where you can receive a decision on account opening in less than a minute. However, this doesn't mean you always get a decision so quickly. The card issuer may need more time to review your application. If so, you'll receive its decision by mail, and possibly also by email.