Retired Recently? It May Be Time for a New Credit Card

by Lyle Daly | Published on Sept. 10, 2021

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Senior woman holding a credit card and her cell phone smiling.

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A credit card upgrade could be just the right financial move for new retirees.

Retirement is one of the biggest and most exciting life changes. For most people, there is a gradual adjustment to make to both your new lifestyle and with how you manage your personal finances.

When you're new to retirement, applying for a credit card might not be the first thing on your mind. It is, however, smart to evaluate your financial situation and shop around for credit card offers because a new card could be beneficial. Here's how.

Rewards that fit your new life as a retiree

There are all kinds of different rewards credit cards. The golden rule for choosing a card is to pick one that matches your lifestyle and spending habits. Those have both probably changed quite a bit now that you're retired, which is why it's worth looking for a new card that's a good fit.

Let's say that your budget has gone through an overhaul. Maybe your gas spending is cut in half now that you're not commuting to work every day, and you're spending more on groceries because you eat at home more often.

If you've been using a credit card that earns bonus rewards at gas stations, it's probably not the best choice anymore. You're better off checking out grocery credit cards that will earn extra cash back or points on supermarket purchases.

That's just one example, but you could do the same if you're spending more on restaurants, entertainment, or anywhere else. To find a card with bonus categories that work for you, start by figuring out where you're spending the most. Then, shop around and compare credit cards that will earn you more in those categories.

Or you may find that you're not spending much in any particular category now. In that case, you could pick a credit card that earns a high flat rate on all your purchases.

Travel credit cards are perfect for seeing the world

Traveling is a popular activity for retirees, and it's easy to see why. When you're working, there's not a lot of time to visit new places. Vacation days are limited, and most people use a good chunk of it to see family every year.

When you're retired, you have much more flexibility. You could travel to the other side of the world and stay there for months, as long as it fits your budget. You might even decide to sell your home after you retire and go on an extended journey.

Your budget will stretch further with a travel card. The best travel credit cards earn rewards that you can put towards your biggest travel expenses, such as airfare, hotels, vacation rentals, and experiences.

Another great thing about travel cards is how they can improve your travel experience. You could use rewards to book first-class tickets instead of economy or get a card offering complimentary hotel room upgrades. For retirees who want to be as comfortable as possible while traveling, benefits like these are nice to have.

Saving money on credit card fees

If you have an expensive credit card with benefits you no longer need, now is the time to consider a more affordable option.

Credit cards with annual fees are valuable when you can use their benefits. But the changes retirement brings sometimes makes these perks less useful. For example, you may find yourself spending less, and earning more rewards isn't worth the cost of an annual fee anymore.

There's nothing wrong with keeping a card that has an annual fee if you're getting your money's worth. If not, there are plenty of no annual fee credit cards that also have great benefits. By making a switch, you can get rid of one of your yearly bills.

Every new retiree should take some time to evaluate their credit card options. You could end up with a card that earns you more rewards, helps you travel, or costs you less in fees.

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