Today’s post is written on automatic pilot. My mind is elsewhere.
Although it is wisest for Seniors to avoid any kind of debt, credit cards have become so pervasive in today’s economy that it is often necessary to use one. Given that reality, seniors should select their cards carefully for maximum benefit.
Like so many products, the right one for you depends upon how you use it. Of all the personal debts we can incur, the credit card is usually the worst, i.e. gives you the least value for your money. Mortgage debt is typically the least expensive, followed by auto loans, then personal loans. Credit card debt, once you are past the introductory teaser rates, can often cost more than twice as much as these other loans. Credit cards provide convenience, but they can charge an arm and a leg for it.
What you want to find is a card with -
- no annual fee,
- low late fees,
- low interest rates on purchases, and
- low interest rates on cash advances.
But to enhance their offerings, some card issuers also offer other features that may influence your choice. These features include -
0%/low Introductory rate on transferred balances,
- Low rate for carrying a balance -
- Convenience only, no balance carried -
- Cash rebates
- Travel/Airline miles
- Gas discounts
What’s a person to do?
- If you are carrying a balance, work on a plan to eliminate it. A 0% introductory rate card may help you achieve that goal, but pick the one with the lowest rate at the end of the introductory period.
- If you pay off the balance each month as you should, look for those with add-on benefits that most appeal to you and are the most generous. For example, some airline programs offer double and triple miles.
- Do not be casual about making your payments. Make certain that your payments will arrive on time.
Some other Internet resources with helpful information include -
- Comprehensive credit considerations for Seniors,
- Bankrate’s Cards for Seniors, and
- Credit Card Debt.
NB. Click below to make a comment. If you would prefer to make an enhancement to the original article, please go to wikiSenior and click on edit.
February 12th, 2008 at 12:23 pm
Thanks for the link to our article. I’m the editor over at http://www.creditcards.com. In editing that story you referenced, I wondered not if there is a generational difference between my parents’ generation and mine about attitude toward debt, but how big it is.
I suspect it’s huge — that a substantial number boomers (disclosure: I am one) will inherit debt free property from their Depression-ear-tinged parents, and use THEM as ATMs, just like they did their own homes.
February 12th, 2008 at 12:25 pm
*redfaded*
That should be “era,” not “ear.”