Retirees today are increasingly becoming credit card holders because it helps them to travel, achieve more of their retirement dreams, and makes things a little more convenient. But where today’s generation is being raised with more credit card savvy, there are still some seniors who are relatively new to the whole idea of credit cards–especially learning how to manage credit on a fixed income. But hey, we know that seniors have a fantastic amount of life experience and wisdom and we’re going to help you use that savvy to make sure you get the most out of your credit card. Here are five simple and great practices for credit card use if you’re retired:
Budget, budget, budget!
We give this advice to everyone, but it’s even more important if you’re on a fixed income. Never spend more on your card than you can afford to pay down every month and if you know you have a major expense coming up, save up for it, then use your card and use the savings to pay it down.
Be extremely wary of frauds.
Telemarketing techniques alone account for 26% of Americans becoming fraud victims. Of those victims, 57% are over the age of fifty. Con artists love to take advantage of senior investors, often using credit card fraud. Unfortunately, many times savings are lost because many seniors don’t realize their being conned until it’s too late.
Here are some good rules of thumb for avoiding frauds: if it sounds too good to be true, it probably is. If the one ‘offering’ the person something won’t submit to the presence of a lawyer, don’t do it, and always read the fine print before signing. Never give your credit card information to anyone and never use it in places you don’t know.
Understand what happens to your debt after you die.
If you own the card solely, state law will determine who owns the debt. The payment may be handled by your spouse or family, come out of your estate, or be written off as a loss. Make sure you read up on the laws of your home to find out who will be liable for the debt if you pass before paying it off. Of course, you should always try to pay it off every month anyway!
Don’t fall for cards with rewards you won’t use and a card limit you can’t afford.
Get a credit card you can afford with rewards you know you will benefit from, or get a card with a very low interest rate so that you have less of a chance to get into debt. Make sure to carefully research a card that you’ll actually use and get the most out of. Again, we say this for everyone, but you have less time to pay off your balance if you get in debt, so minimize the chances of getting too deep in debt from the start.
Do as much research and learning as you can about credit cards and how they affect your finances and credit score.
This is important and not enough people in general do this. Figure out how credit cards affect not only your budget, but also how they impact your credit score. Learn everything you can about holding a credit card, methods to pay down debt and how you can best take advantage of your chosen card to squeeze the most out of it for less money.
You are smart, independent, savvy and wise…use these traits to ensure that you can make the most of your retirement, your finances and your credit. This way you can do all of the things you want to do in your golden years without worrying about being in debt all over again.