By Mike Faden | American Express Credit Intel Freelance Contributor
6 Min Read | August 13, 2020 in Cards
For senior citizens, rewards credit cards may help with a variety of goals and everyday activities, from international travel to grocery shopping.
If travel is a retirement goal, travel rewards credit cards provide points toward flights and hotels, along with perks that can make travel more relaxing.
Cash back cards can help a fixed income stretch further by providing money back on everyday spending.
In your golden years, you generally have more time to do whatever you want – whether that means international or domestic travel, eating out with friends, or simply taking it easy. On the other hand, many senior citizens have more-or-less fixed incomes, so you may also be looking for ways to help your dollars stretch further toward those goals.
Used responsibly, credit cards can be handy tools to help senior citizens achieve all of the above. A wide variety of credit cards offer different benefits for senior citizens. So, it’s important to consider your goals, spending patterns, and financial resources when choosing credit cards to meet your needs. Two main categories of credit cards can assist:
Rewards credit cards: With rewards credit cards, you earn rewards points as you spend with the card. You may also earn additional sign-up bonus points for reaching specific spending milestones – typically averaging a few thousand dollars – within a few months of getting the card. You can redeem your points for travel, dining, entertainment, gift cards, or other benefits.
Cash back credit cards: These work similarly to rewards cards, but instead of rewards points you get cash back, usually as a statement credit.
For many senior citizens, it may be helpful to know that some credit card providers include certain protections that may help when unpredictable circumstances arise. Depending on the card, these benefits vary and may include:
For many senior citizens, retirement presents terrific opportunities for travel. There’s more time to plan and enjoy extended trips without the constraints of a 9-to-5 working schedule. If travel appeals to you, a travel credit card may offer useful perks. With a travel rewards credit card, you generally earn points for all spending but get the highest ratio of points per dollar for travel-related purchases, like flights and hotel stays. You can then redeem those points toward more flights, hotels, tours, or other travel. There are several kinds of travel rewards credit card:
Within each of these card types, there are different “tiers” of credit cards. Top-level premium cards offer the highest rewards, including the most points per dollar in targeted spending categories. But they may have higher annual fees, up to several hundred dollars.
If, as a senior citizen, you have the flexibility to travel off-peak, you may benefit from a change in the way many airlines and hotels are pricing their reward travel. Instead of requiring a fixed number of points for a flight or hotel stay, they’re using “dynamic pricing.” That means the number of points needed varies depending on the price that you’d pay in dollars, which in turn depends on how much demand there is for that particular seat. If you’re able to travel when demand is low, you may need fewer points for your flight or hotel stay.
Some travel credit cards also include benefits that can help make travel less stressful. Depending on the card, those benefits may include:
Cash back credit cards may be useful for senior citizens whose priorities include making their money go further for everyday purchases, since they tend to reward spending in categories such as supermarkets and restaurants. As you spend with a cash back credit card, you get a percentage of the cash back, usually as a statement credit, and some credit cards also offer introductory cash back bonuses of several hundred dollars if you meet certain spending requirements within the first few months of getting the card. You’ll generally get at least 1% cash back on all purchases, with higher percentages for specific spending categories such as supermarkets, restaurants, and U.S. gas stations.
If you’re focused on minimizing fees and interest, you may consider low or 0% intro APR credit cards, although these cards may offer fewer rewards and perks than others.
Senior citizens may find rewards and cash back credit cards to be useful tools for helping to achieve a range of retirement goals, from international and domestic travel to simply making the most of a fixed income. A wide variety of credit cards offer different benefits, so think carefully about your goals and spending habits when choosing cards to meet your needs.