The Best Credit Card Rewards for Retirees
Find out how rewards can make a fixed income stretch further
For most people, retirement means a new kind of freedom, but also a new set of financial concerns. Whether this is your first day without a tie in 50 years or you’ve been retired for a decade, chances are you’re on the lookout for ways to live more comfortably within your retirement budget. Credit card rewards programs are an excellent way to help stretch a fixed income further by optimizing the returns on what you’re already spending.
Earn big‑time cash back that never expires.
Travel Rewards Cards
Freedom from your daily 9 to 5 opens up a world of possibilities for travel, from visiting grandchildren to finally taking that African safari. The possibilities are endless…but your budget may not be. Travel rewards cards allow you to earn miles or points toward future trips while you go about your daily spending.
Choosing the best credit card rewards depends on your spending and travel habits. If you are a frequent flier and hotel guest with particular chains, selecting their branded cards may be the best choice for you. However, if you would like more variety in your travel choices, a major credit card that provides miles or points that can be redeemed with many carriers may be a better fit. In general, look for a card that makes it easy to redeem rewards and provides them in the form that you want, whether that is airline miles, hotel points or cash back. Before selecting a travel rewards card, be sure you ask:
- Are there blackout dates or other restrictions when booking travel with rewards?
- Expiration dates: How long do you have to use the rewards?
- Are there certain categories or types of purchases that earn more travel rewards than others?
Earn Unlimited 1.5x Miles on Every Purchase.
Cash Back Rewards Cards
Cash back credit cards give you cash back for your everyday spending. Depending on the program, these rewards can typically be in the form of an electronic deposit, statement credits, gift cards or sometimes even charitable donations. By using a cash back rewards card, you earn points or cash back every time you fill up your gas tank, buy groceries or take a friend out to coffee.
Important features to look for in rewards cards are the amount of rewards earned per dollar spent, card carrying fees and ease of redemption. Some cards offer really attractive rates of return for spending, but carry very high annual fees. Be certain to do the math on card fees versus your estimated spending on the card. If there is a high annual fee and you only put an occasional expense on credit it may not be worth your while. However, if you use a card with great rewards and low fees for nearly all your spending you’re likely to come out way ahead of the game.
Rewards can help you live even more comfortably in retirement when you fully understand what your program has to offer. When signing up for a new card, be sure to discuss all the features and benefits with a customer service representative. There may be opportunities to earn additional rewards with certain types of spending depending on the time of year or with certain brands. Also, rewards cards can offer additional benefits such as travel insurance coverage or discounts with particular retailers.
Finally, remember that all of the above only applies if you plan on paying off your credit card debt each month. If you typically carry a balance or find yourself carrying one, a credit card with a low APR is likely a better choice to avoid paying interest on purchases.