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

Credit Cards, Rewards Credit Cards
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Chase recently polished up its AARP Credit 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% for 12 months on purchases and balance transfers, and then the ongoing APR of 16.49% Variable 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

AARP Credit Card offers an APR of 0% for 12 months on purchases and balance transfers, and then the ongoing APR of 16.49% Variable 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. Its annual fee is $0, and a that comes with 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 AARP Credit 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 Credit Card 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 Credit Card 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 American Express deposits 2% cash back on all purchases, right into your Fidelity brokerage or checking account.

There are also a handful of cards offer a base rate of 1% and rotating categories that earn 5% back, like the  Chase Freedom®. 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.

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® Card - No Late Fees Ever, which offers 0% for 21 months on purchases and balance transfers, and then the ongoing APR of 13.24% - 23.24% Variable.

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