Retiring? It May Be Time to Apply for a New Credit Card

Applying for a new credit card in anticipation of retirement could make good sense.

Leaving the workforce is a major change to every aspect of your life. Once you've made the decision to give notice and stop working for good, it may make sense to consider getting a new credit card along with the other modifications you're making to your financial life.

Here's why it can be a good idea to apply for a new credit card shortly before retiring.

Your spending habits may change

Upon retiring, your life is likely going to be very different than it was while you were still working. As a result, there's a good chance you will spend your money differently than you did when you still had a job.

You may, for example, no longer have a long commute so the amount you were spending on gas could fall dramatically. However, if you start taking lots of plane trips to indulge your dreams to travel as a retiree, the bulk of your expenditures could be in the travel industry.

If your spending habits have changed, then the card you may have been using might no longer have a bonus program that works for you. If your old card gave you extra bonus rewards for buying gas, for example, you may want to switch to a travel card instead.

The key is to consider what type of spending you will be doing the most as a retiree, and then to look for a credit card that gives you extra points, miles, or cash back for those types of expenditures.

You may also want to consider what kinds of cardholder perks you'll take advantage of. If you'll be traveling often, airline lounge access could make your trips much more enjoyable, and it could even be worth paying an annual fee for a travel credit card that offers it.

If you take the time to think about your future retirement budget and the lifestyle shifts you anticipate making, you can make an informed choice about whether switching credit cards is going to give you more bang for your buck.

It can be a good idea to apply for a credit card while you're still earning income

If you do decide it makes sense to get a new credit card for your changed retirement spending, it's a good idea to apply for it before actually quitting work if you can.

You may be asked about your income during the card application process and the amount you are earning could affect whether you are approved for the card as well as how large your line of credit ends up being. If you still have your job, you'll have a more stable income source -- and likely more retirement income -- so it will likely be easier to get approved, even for cards with stringent approval requirements.

As a retiree, it's worth taking steps to make every dollar count since you'll no longer have paychecks coming in. Having the right credit card is an easy way to boost your rewards and take advantage of valuable benefits. It's worth taking the time to consider whether a new card is right for you.