With more free time and high average credit scores, retirees can reap the rewards of travel credit cards more than almost anyone else

Holly Johnson

Oct 19, 2019, 17:52 IST

With more free time and high average credit scores, retirees can reap the rewards of travel credit cards more than almost anyone else

Tom Thiercelin/EyeEm/Getty Images

Retirees in good financial standing are perfect candidates to open a rewards credit card.
They have the free time to travel, and having good credit could allow them to get approved for some of the best cash-back and travel cards.
Our top picks for travel rewards cards that can help retirees travel include the Chase Sapphire Preferred Card and the Capital One® Venture® Rewards Credit Card.
Read more personal finance coverage.

When you consider how most major credit card issuers market their cards these days, it's easy to believe their prime market includes millennials, Gen Xers, and 50- and 60-somethings who are still working. After all, many credit card commercials feature young, seemingly high-income professionals in airport lounges or young families charging their groceries to a rewards credit card to earn cash back. It's easy to believe card issuers are targeting people young enough to spend a lot on their cards - and maybe even those who are likely to rack up long-term debt.

But, you don't have to be in your working years to get approved for a rewards credit card, nor do you have to be cash-strapped to benefit from one. In fact, there are a ton of reasons rewards credit cards are actually ideal for baby boomers and retirees who have already walked away from work.

If you're older and wondering if a rewards credit card could help you travel more or earn free stuff, the answer is probably yes. Here are some of the reasons you should consider a rewards credit card for your everyday spending - along with some of our top picks for earning both cash back and travel rewards.

Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It's important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back.

Retirees have lower levels of credit card debt

If you actually hope to benefit from the rewards you earn with a credit card, you have to avoid credit card debt. It's not difficult to see why this matters so much when you consider the fact that the average credit card APR is over 17% at the same time the average rewards card gives you 1-3% back at most.

But statistics show that older people have lower credit card debt levels in general. A 2019 study from ValuePenguin showed that millennials and individuals over the age of 74 tend to have the lowest credit card debt on average, and that they're more likely to not even have a credit card at all. Individuals ages 65 to 74 also had much lower credit card debt levels than those ages 35 to 64.

If you're a retiree who doesn't have any debt, you could easily use a credit card to earn cash back or travel rewards. The key to making the most out of card options available today is using them for purchases you can afford to pay off and paying your bill in full every month.

Some of the best cash-back credit cards don't even have an annual fee. Some examples include:

Chase Freedom: When you sign up for the Chase Freedom, you'll earn $150 in bonus cash when you spend $500 on your card within three months. You'll also earn 5% back on up to $1,500 spent in categories that rotate each quarter (when you activate the bonus) plus 1% back on all other purchases. There is no annual fee, and you can redeem rewards for statement credits, gift cards, travel, experiences, and more.
Citi® Double Cash Card: The Citi Double Cash, which also comes with no annual fee, lets you earn 2% back for each dollar you spend - 1% back when you make a purchase and another 1% when you pay it off. You can redeem your rewards for statement credits but you can also exchange them for Citi ThankYou points that free up some redemption options like gift cards and merchandise.

Read more: The best cash-back credit cards

Retirees have time to travel

If you've always wished you could travel but couldn't make it work in the thick of your career, the best time to follow your dreams could be now. Plenty of studies show that Americans are often scared to use their vacation days because they're afraid they'll be replaced, and it's a proven fact that companies in the United States offer less time off in general than in many other countries around the world.

But when you're retired, the world is your oyster - provided you can find the funds to get away. Travel credit cards can help since they offer points and miles you can use to score free flights, hotel stays, and more. Some of the best travel credit cards for retirees include:

Chase Sapphire Preferred Card: The Chase Sapphire Preferred gives new cardholders 60,000 points, worth $750 in travel, when they spend $4,000 within three months from account opening plus 2x points on travel and dining and 1 point per dollar on other purchases. There's a $95 annual fee, and you can redeem Ultimate Rewards points for travel through the Chase portal, transfer them to airlines and hotels, or redeem for cash back, gift cards, merchandise, and more.
Capital One Venture Rewards: The Capital One Venture is an extremely easy travel credit card to use and understand. This card lets you earn 2 miles per dollar on everything you buy (plus 10x miles on paid hotels booked via hotels.com/venture), and you can also earn 50,000 miles when you spend $3,000 on your card within three months of account opening. On the redemption side of the equation, you can cash in miles for any type of travel at a rate of 1 cent per point, but you can also transfer to a handful of airline partners.

Retirees can take advantage of last-minute travel deals

Travel can be considerably cheaper when you're able to take advantage of last-minute travel deals, and that's especially true if you're flexible on where you go. You could search for last-minute cruises, play around with Google Flights to find the least expensive flight options for where you want to go, or sign up for airfare alerts that let you know when a sale comes up from your home airport.

Websites like The Flight Deal and Secret Flying also let you find out about short-term and last-minute travel deals all over the globe, and most of these deals are last-minute or only available for select dates.

Retirees can avoid peak travel times

Anyone who has worked in an office with other people knows how difficult it can be to get vacation approved when the kids are out of school or during winter, spring, and summer breaks. But when you're a retiree, you can theoretically travel any time you want.

Being able to book off-peak travel can definitely help you enjoy your favorite destinations with much lighter crowds, and prices can be considerably lower, too. Frequent flyer programs and hotel programs also tend to have more availability outside peak travel dates as well, which makes it easier to cash in your points and miles.

They have good credit

Most of the top rewards and travel credit cards require consumers to have good credit, which typically entails having a FICO score of 740 or above. While this can be a difficult bar to reach for some age groups, those in the older age brackets don't seem to have a problem.

In fact, a recent study from Experian showed that consumers ages 60 and older had the highest average credit score of all age groups, at 749. The next-highest average credit score (706) went to consumers ages 50 to 59, and scores were all downhill from there.

If you're a retiree with great credit, you have yet another edge that could make rewards work for you. But you will never benefit from a rewards credit card if you don't sign up for one.

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

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Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

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