How to Pick the Best Credit Card in Retirement

Yes, you’re retired, but you still need to work on your credit score. If your household debt — be it a mortgage or car loan — is paid off, responsible use of credit cards is the best way to keep that score high.

You might think: Why bother? After all, you don’t plan to ever apply for a mortgage again. But you’re still driving a car, right? Credit scores impact the auto insurance rate you pay, and the car loan terms you get.

And let’s not forget that an excellent credit score will make you eligible for the best credit cards. When you’re no longer actively generating income, you want a card that pays you the best cash-back or travel rewards.

To find your one best card, stop by our Solutions Center and search for credit cards offering different types of rewards. Several factors will determine the best type of card during retirement, including:

Your income

If you’ve reached the $1 million benchmark for retirement savings, income in retirement should not be a problem. But for a large percentage of people, that’s unlikely to happen.

If you’re facing a reduced income, you want a card that works for you. That means a card that rewards you for expenditures that are unavoidable. Look for a card with no annual fee whenever possible. Also look for:

  • Generous cash back on basics like gas and groceries. Many of these cards do not have an annual fee. Some do charge a fee, but the rewards may be generous enough to make the card worthwhile.
  • Easily understood terms. Avoid a card with frequently changing cash-back bonuses that you have to keep track of and register for.

Your lifestyle and planned activities

Many retirees look forward to extensive travel. In that’s you, shop for a card with:

  • No foreign-transaction fee. Many cards have a foreign-transaction fee of 2 percent or 3 percent, which will unnecessarily increase the cost of overseas purchases.
  • Generous travel rewards. This might include airline miles and hotel stays, or generous bonus miles as part of an introductory reward when you sign up for the card.

If driving will be your primary mode of transportation — perhaps you’re embarking on a national tour in your RV — look for a card that offers the best perks on gasoline purchases.

Whether you carry a large balance on your current card

A growing number of retirees carry a balance from month to month. That’s not good. You’ll want to retire that debt as quickly as possible. So, look for a card that:

  • Offers a generous balance transfer deal. Some offer as many as 18 months with zero percent interest. Have a plan to pay the balance off before the introductory rate expires.
  • Has zero or a low balance transfer fee. Paying a fee like this can eat into the advantage of making the transfer in the first place.
  • Has a low interest rate after the initial zero percent rate expires. A low rate offers some protection if you slip up and carry a balance again.

For more tips, check out:

Are you managing your credit cards responsibly in retirement? Tell us more in comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
5 Surveys For Money Sites To Get Paid For Your Opinion
5 Surveys For Money Sites To Get Paid For Your Opinion

Yes, you can earn extra cash by taking online surveys. But some websites are better than others for this. Here are a few of our favorites.

5 Reasons You Should Claim Social Security ASAP
5 Reasons You Should Claim Social Security ASAP

Experts often recommend postponing claiming your Social Security retirement benefits. But there are situations in which you should start taking the money sooner.

10 Common Ways Seniors Get Scammed
10 Common Ways Seniors Get Scammed

Here’s what to watch for to make sure you don’t fall prey to some of the biggest rip-offs targeting seniors.

7 Ways to Shop at Costco Without a Membership
7 Ways to Shop at Costco Without a Membership

You don’t necessarily need to join to get in on the warehouse store’s savings.

7 Hobbies That Help You Live Longer
7 Hobbies That Help You Live Longer

Research shows some hobbies can add years — or even decades — to your life.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

How to Buy Gas At Costco Without a Membership
How to Buy Gas At Costco Without a Membership

The warehouse club often has some of the cheapest gas in town. Here’s how you can get it as a nonmember.

10 Things to Stop Buying If You Want a Clutter-Free Home
10 Things to Stop Buying If You Want a Clutter-Free Home

If you like to keep things simple, avoid these purchases.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Vacuums from this brand can last a half-century, if not longer — and they’re hot on the resale market.

A Simple Way to Silence Robocalls Today
A Simple Way to Silence Robocalls Today

A few steps can keep your phone from ringing when a spammer calls.

This Company Makes the Best Tires in America
This Company Makes the Best Tires in America

Driver satisfaction with tires is at an all-time high, but one brand stands out.

This Health Issue Can Hint at Dementia Years in Advance
This Health Issue Can Hint at Dementia Years in Advance

One type of pain is especially associated with cognitive decline.

Can I Switch to Spousal Social Security Benefits When My Ex Dies?
Can I Switch to Spousal Social Security Benefits When My Ex Dies?

Knowing when to claim can help you maximize benefits.

36 Things That Will Be Obsolete Soon
36 Things That Will Be Obsolete Soon

The writing is on the wall for dozens of things we have grown up with.

Medicare Will Not Cover These 6 Medical Costs
Medicare Will Not Cover These 6 Medical Costs

Don’t let these health care expenses catch you off guard in retirement.

8 Things You Should Always Buy on Amazon
8 Things You Should Always Buy on Amazon

The giant retailer shines when it comes to these things, from basics to hard-to-find specialty goods.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

8 Federal Income Tax Breaks for Homeowners
8 Federal Income Tax Breaks for Homeowners

Some of these deductions and credits are available to a wide swath of homeowners.

12 Deep Discounts Available on Amazon This Friday
12 Deep Discounts Available on Amazon This Friday

These items are steeply discounted — but the deals won’t last long.

5 Ways to Fill Your Pantry With Free Food
5 Ways to Fill Your Pantry With Free Food

Anyone can take advantage of these resources.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

6 Reasons You Should Stop Hiding Cash at Home
6 Reasons You Should Stop Hiding Cash at Home

Stashing money around the house is anything but harmless.

5 States With the Worst Health Care for Retirees
5 States With the Worst Health Care for Retirees

All of these states are located in the same region of the nation.

5 Products You Should Never Buy Generic
5 Products You Should Never Buy Generic

Sometimes the brand-name version is clearly superior.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.