1.Credit cards take a back seat to retirement budget
Credit card debt is something seniors should try to avoid in retirement. High interest charges can quickly eat away at fixed incomes and make it extremely difficult to ever dig out of debt.
Nevertheless, many retirees continue holding onto card debt. Some 37 percent of households headed by an individual age 65 to 74 carried a balance, according to the Federal Reserve’s 2009 “Survey of Consumer Finances.”
To protect yourself, take a close look at your budget and adjust credit card spending habits so they’re properly aligned with your retirement income. And don’t forget to always pay your credit cards in full and on time each month.
Compare credit card offers online
Even though you've turned 65, chances are that credit card offers are still flooding your mailbox. Consumers received 5 billion pieces of direct mail last year, by one estimate, up from 3.6 billion in 2010. Do yourself a huge favor and ignore all those card offers you receive in the mail!
Not only are there generally better deals to be found online, but it’s also much easier to compare credit card offers side-by-side and make a more educated decision about which card is the best fit for your personal needs.
Say no to services sold over the phone
Many customer service representatives are experts in the art of selling extra products once they’ve got you on the line. Unfortunately, most of the additional products or services peddled over the phone aren’t worth the additional cost.
Save yourself the unnecessary expense and “just say no” to any service pushed over the phone. If you really do believe something like identity theft protection or payment protection insurance might be useful to you, take some time to conduct additional research online and review all your options. You can always call back and add the service at a later time if you’re unable to locate a better deal.
Leverage credit card sign-up bonuses
Signing up for a few airline miles credit cards throughout the year could save you thousands in travel expenses. In fact, some card offers are currently offering more than $500 in free travel for simply signing up and making a single purchase. And if you’re not into traveling anymore, don’t worry. There are always great cash-back deals to be found as well.
If you’re willing to follow some basic credit card rules, such as always paying your monthly balances on time and in full, taking advantage of lucrative sign-up bonuses can be the greatest monetary reward for those who continue to maintain excellent FICO scores in retirement.
– Joshua Heckathorn is president of Creditnet.com, an online resource for consumers to educate themselves about credit, compare the best credit card offers, and apply securely online.