Seniors in the market for some credit have an obvious option: Chase offers a Rewards Platinum Visa Card endorsed by AARP. But Tim Chen, CEO of NerdWallet.com, suggests retirees may want to look beyond the branded card.
“Despite the name, it’s not the best card for retirees,” Chen says. He argues that the card carries a noncompetitive annual percentage rate that ranges between 13.24% and 19.24%, depending on the cardholder’s credit-worthiness. Another drawback is the AARP card’s lackluster cash-back rewards system, which pays a point for every dollar spent on purchases.
“A reward rate of 1% or less is pretty much industry standard, and anyone who tries can find a much better deal,” Chen says. “There are too many 1.5% to 2% rewards cards out there.”
Of course, the AARP card isn’t without its benefits.
“The card from Chase is the only one endorsed by AARP and offering members unlimited cash-back rewards [with] no caps, no tiers,” counters Gail Hurdis, a spokeswoman for Chase. The card also offers exclusive discounts through its AARP partnership, which allows cardholders to save on their annual $16 AARP membership.
Cardholders also have access to senior-friendly Web tools, including a financial guide designed especially for seniors, that help them manage their account, Hurdis says.
Still, it never hurts to shop around for your next credit card. What should a retiree consider before applying?