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Review: New AARP Credit Card is Much Better Than the Old

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Chase recently polished up its AARP Rewards card, complementing a 1% base rewards rate with 3% back on travel purchases. The new version is now a decent card for retirees, offering 0% interest on balance transfers and purchases for the first 12 months as well as a solid rewards rate. Just like with any other card, whether or not it’s a good option depends on your spending habits, credit score and priorities, but in our opinion, this card is well tailored to the purchasing habits of senior citizens.

The details

Chase’s revamped AARP Visa offers a 0% APR for 12 months, on both purchases and balance transfers, which is a great deal on short-term debt. The rate jumps considerably after that, so it’s probably not the best option for anyone revolving debt for the long haul. It has no annual fee, and a number of side perks like purchase protection, price protection, return protection and extended warranty protection.

We expressed our doubts last year about the old Chase AARP card, but they’ve since upped their game a bit. The rewards rate has been increased from 1% all around to an unlimited 1% base rate, plus 3% on travel and 5% on all purchases made in the first 6 months. The 5% intro rewards rate is a steal: if you’re planning on making a big one-time purchase, the card will net you substantial rewards. And the 3% on travel will come in handy if you spend your retirement traveling the world, or even just visiting your grandkids.

The AARP benefits are fairly peripheral, though. Sure, you can redeem your rewards points for AARP membership or donations – but you can also redeem them for cash and use that to pay AARP dues, so that feature is a bit unnecessary. And the interest rate is nothing special – as a senior, you should have a long credit history and hopefully a good credit score, so you can probably qualify for a lower APR if necessary.

While this card would never rank at the top of any lists in terms of rewards or in terms of interest rates, it’s hard to find a card that scores decently on rewards, balance transfers, and purchase APRs like the AARP Visa does. Chase’s VP of Public Relations, Gail Hurdis, notes, “Our team and AARP spent the past year looking at the members and seeing what they’d find as valuable rewards. After that research, we designed our program to suit their buying habits.”

With this card, Chase is also supporting the AARP Foundation’s Drive to End Hunger, which works to eliminate hunger among older Americans, donating $0.03 for each transaction made and $1 for each account opened, up to $2 million.

Other options worth considering

If you have great credit and you’re not carrying a balance, you should look to maximize rewards. The AARP Visa offers above average rewards, but you may be able to do better, depending on how you tend to spend your money.

There are a handful of cards that offer straight-up 2% back. The Capital One® Venture® Rewards Credit Card, for example, lets you earn 2% on all purchases, which you can then use to offset travel purchases. And the Fidelity Amex deposits 2% cash back on all purchases, right into your Fidelity brokerage or checking account.

Capital One® Venture® Rewards Credit Card
Capital One Venture Rewards Credit Card
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on Capital One's
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  • Enjoy a one-time bonus of 40,000 miles once you spend $3,000 on purchases within the first 3 months, equal to $400 in travel
  • Earn unlimited 2X miles on every purchase, every day
  • Fly any airline, stay at any hotel, anytime
  • Travel when you want—no blackout dates
  • Miles don't expire and there's no limit to how many you can earn
  • No foreign transaction fees
  • No annual fee for the first year; $59 after that
  • 100% free Capital One® Credit Tracker — see your monthly credit score anytime and get automatic alerts
thumbsupPros
  • High rewards rate
  • No foreign transaction fee
thumbsdownCons
  • Has annual fee
Annual Fee Signup Bonus APR , Variable* APR Promotions
$0 intro for first year; $59 after that Enjoy a one-time bonus of 40,000 miles once you spend $3,000 on purchases within the first 3 months, equal to $400 in travel 13.9% - 20.9% (Variable) Purchase: None
Transfer: None

There are also a handful of cards offer a base rate of 1% and rotating categories that earn 5% back, like the Chase Freedom. So, for example, you could earn 5 times the rewards points when you buy groceries and gas in July through September. So if you don’t anticipate spending that much on travel, the 3% bonus on the AARP card won’t help much, so it’s worth checking if these categories would better fit your spending habits.

Chase Freedom® - $200 Bonus
Chase Freedom - $100 Cash Back Credit Card
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on Chase's
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  • For a limited time, earn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening
  • Earn a $25 Bonus after you add your first authorized user and make a purchase within this same 3-month period
  • 0% Intro APR for 15 months on purchases and balance transfers. After the intro period, a variable APR of 13.99-22.99%
  • 5% Cash Back on up to $1,500 in combined purchases between October 1 — December 31, 2014 at Amazon.com, Zappos.com and select department stores
  • You'll enjoy new 5% categories every 3 months like gas stations, restaurants, and Amazon.com. It's free and easy to activate your bonus each quarter!
  • Unlimited 1% Cash Back on all other purchases
  • No annual fee and rewards never expire
thumbsupPros
  • Bonus cash back categories
  • No annual fee
  • 0% for 15 mos on transfers
Annual Fee Signup Bonus APR , Variable* APR Promotions
$0 Get a $200 Bonus after spending $500 on purchases in your first 3 months from account opening. 13.99% - 22.99% (Variable) 0% APR for 15 months on purchases and balance transfers

If you have bad credit or are paying off debt

If your credit needs work, you probably shouldn’t worry about credit card rewards. Instead, focus on rebuilding credit with a secured card. Or if you tend to carry a balance month-to-month, look for the lowest interest rate out there. In either case, you may be better served at a credit union. Credit unions tend to be more sympathetic to those with poor credit, and others with a limited credit history.

If you want to get rid of a mountain of debt from another credit card, though, you should look for the longest 0% balance transfer period out there. If the debt is large enough that you can’t pay it off in a year, look at cards like the Citi Simplicity, which is currently offering 0% on purchases and balance transfers for up to 18 months.

Citi Simplicity® Card
Citibank Simplicity Credit Card
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on Citibank's
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  • 0% Intro APR on Balance Transfers and Purchases for 18 months. After that, the variable APR will be 12.99% - 22.99% based on your creditworthiness.
  • There is a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater.
  • No late fees - Ever
  • No penalty rate - Ever
  • No annual fee - Ever
  • Save time when you call with fast, personal help, 24 hours a day.
thumbsupPros
  • No late fee
  • No annual fee
  • 0% for 18 months*
thumbsdownCons
  • No rewards
  • Needs excellent credit
Annual Fee Signup Bonus APR , Variable* APR Promotions
$0* 0% Intro APR on balance transfers and purchases for 18 months. After that, the variable APR will be 12.99% - 22.99% based on your creditworthiness. 12.99% - 22.99%* (Variable) 0%* on purchases and balance transfers for 18 months*