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Wednesday, May 24, 2023

Best Credit Cards for Older Adults

The best credit cards come with attractive returns that can stretch your monthly budget for groceries, drugstore purchases, travel, and more!

Have you been using an old credit card with lousy rewards out of habit? Worse yet, are you still writing checks to make payments? It’s high time you switched to a credit card that gives you at least 2% cash back on everything you buy. Any time you pay for utilities, groceries, travel, and more, you can save money and get protection for your purchase by using a credit card.

Your Credit Score 

All of these cards require good or excellent credit, with a rating of at least 670. Your score will drop slightly when applying for a new card, but it will go back up in a few months. One tip is not to cancel your card(s) with the longest credit history. Another is to apply (you can do this online) to increase the amount of credit you can borrow from cards you’ve had awhile; if your spending stays the same, it will decrease the percentage of credit you are using. No one needs a perfect credit score of 850, but it’s important to maintain one in the excellent range of at least 780 to 800 for the best mortgage and loan rates. 

Pay It Off Monthly

Credit cards can be financially rewarding in many ways, but only if you pay them off in full every single month. Why? They all charge high, double-digit interest fees that more than cancel out their benefits. To avoid paying interest, automate your monthly credit card payment.  

It’s easy to get confused by the bewildering array of cards on the market. Here is what you need to check:

  • Welcome bonus. Spend X amount of dollars in X amount of time, and you’ll get a one-time reduction of your bill, usually in the 100s of dollars. It may be offered in the form of points that have to be redeemed, but they’re worth a certain amount. One way or another, it’s a freebie!
  • Annual fee. You’ll pay this every year for the privilege of having the card, so make sure the rewards will exceed this fee. Some cards waive the fee for the first year to entice you into signing up; others have no annual fee. 
  • Interest rate. Whatever exorbitant fee the card comes with, and they are all exorbitant, you never ever will have to pay it if you automate payment in full every month. If you can’t commit to this, don’t get a card. Period.
  • Percent off. Every card offers a certain percent off of every purchase, or rolling categories, or certain categories. Understand exactly what it is. Put a piece of white tape on your card with the categories worth spending on it if you have more than one card. (If you’re someone who is better off with a spreadsheet, more power to you.)
  • Protections and benefits. Credit cards generally protect you against fraudulent purchases made on your card if you report them promptly. Always report a stolen card. In addition, they may come with extra benefits like travel insurance or no foreign transaction fee. Read the offer carefully and keep a copy of your card’s benefits.

Now that you know what to look for, here are some credit cards that offer some attractive benefits. The first five have no annual fee.

Card Bonus and Yearly Fee Why We Like It for Seniors
Blue Cash Everyday Card from American Express $200 cash back after spending $2,000 on purchases in the first 6 months. No annual fee. 3% cash back at US supermarkets, 3% cash back for US online retail purchases, 3% cash back at US gas stations (all up to $6,000 in annual purchases).
Citi Double Cash Card No welcome bonus. No annual fee. 1% cash back when you buy, and another 1% cash back when you pay for a total of 2% off every purchase.
AARP Essential Rewards Mastercard from Barclays $200 cash bonus after spending $500 in the first 3 months. No annual fee. 3% cash back at drugstores (except Target and Walmart) and gas stations.
Costco Anywhere Visa Card by Citi No welcome bonus. No annual fee. 4% cash back at all US gas and EV charging stations (up to $7,000 annually), 3% cash back on travel and restaurants, 2% cash back on Costco purchases.
Chase Freedom Flex Card $200 bonus after spending $500 in the first 3 months. No annual fee. 5% cash back on quarterly categories (up to $1,500 in purchases) and travel booked with Chase Ultimate Rewards, 3% cash back on all dining and drugstore purchases.
Blue Cash Preferred Card from American Express $250 statement credit after $3,000 in purchases in the first 6 months. Annual fee of $95 is waived for the first year. 6% cash back at US grocery stores ($6,000 limit) and certain streaming services, 3% cash back on US gas stations and transit.
Chase Sapphire Preferred Card 60,000 points worth $750 after spending $4,000 in the first 3 months. $95 annual fee. $50 annual Ultimate Rewards Hotel Credit, 5x points on travel purchased through Chase Ultimate Rewards, 3x points on dining, 2x points on other travel and 1x on all other purchases.
US Bank Altitude Connect Visa Signature Card 50,000 points worth $500 after spending $2,000 in eligible purchases in the first 120 days. $95 annual fee waived the first year. 5x points on prepaid hotels and car rentals made through Altitude Rewards Center, 4x points on travel, gas and EV charging stations, 2x points on streaming services and grocery stores, grocery delivery and dining, and 1x point on all other eligible purchases.

This article is not intended to be a substitute for professional financial advice from a qualified financial advisor.