If you’re an AARP member or considering joining, you might have come across AARP credit cards. These cards offer benefits tailored to the needs of older adults, focusing on cashback, travel perks, and healthcare-related rewards. I’ll take a deep dive into AARP credit cards, their features, benefits, potential drawbacks, and how they compare to other options.
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Understanding AARP Credit Cards
AARP credit cards are co-branded with financial institutions, primarily Barclays. They offer competitive rewards programs, often catering to dining, travel, and healthcare spending. Many seniors appreciate these cards for their simplicity and direct benefits. However, it’s essential to know whether they align with your financial habits before applying.
Types of AARP Credit Cards
AARP currently offers the AARP® Essential Rewards Mastercard® from Barclays. Here’s a breakdown of its key features:
| Feature | Details |
|---|---|
| Annual Fee | $0 |
| Rewards Structure | 3% cashback on gas and drug stores, 2% on medical expenses, 1% on all other purchases |
| Welcome Bonus | $100 cashback after $500 spent in the first 90 days |
| Intro APR | 0% for 15 months on balance transfers, then variable APR |
| Regular APR | 20.99% – 29.99% variable |
| Foreign Transaction Fee | None |
| Additional Perks | Free FICO credit score, Mastercard benefits |
Key Benefits of AARP Credit Cards
- Cashback on Essential Categories: AARP credit cards offer high cashback on categories frequently used by older adults, such as healthcare and gas.
- No Annual Fee: This makes the card cost-effective if used wisely.
- Introductory Offers: A 0% intro APR period can help consolidate debt without incurring interest.
- Security Features: Fraud protection and contactless payments enhance safety.
- AARP Membership Perks: Cardholders may access additional benefits exclusive to AARP members.
Potential Drawbacks
While AARP credit cards have attractive benefits, they might not suit everyone. Some drawbacks include:
- High Regular APR: After the intro period, interest rates can be high.
- Limited Reward Categories: Unlike general cashback cards, rewards are restricted to specific spending types.
- Better Options Available: Depending on spending habits, other cards might offer superior rewards.
Comparing AARP Credit Cards with Competitors
To see how AARP credit cards stack up against other popular options, let’s compare them with other senior-friendly cards:
| Feature | AARP Essential Rewards Mastercard | Chase Freedom Unlimited | Citi Double Cash |
|---|---|---|---|
| Annual Fee | $0 | $0 | $0 |
| Cashback | 3% on gas, 2% on medical | 1.5% on all purchases | 2% on all purchases |
| Intro APR | 0% for 15 months | 0% for 15 months | 0% for 18 months |
| Regular APR | 20.99% – 29.99% | 20.49% – 29.24% | 19.24% – 29.24% |
| Foreign Transaction Fee | None | 3% | 3% |
Looking at the table, the AARP card stands out for medical-related spending. However, if you prefer flat-rate cashback without category restrictions, Citi Double Cash might be a better fit.
Example of Rewards Calculation
Let’s consider an example to better understand how the AARP credit card rewards work. Suppose you spend monthly as follows:
- $300 on gas
- $200 on medical expenses
- $500 on other purchases
Using the AARP card, you would earn:
- 3% of $300 = $9
- 2% of $200 = $4
- 1% of $500 = $5
Total cashback per month: $18
Annually, this amounts to $216, making it a practical option for those with similar spending patterns.
Who Should Get an AARP Credit Card?
This card is best suited for:
- Retirees and Seniors: Those who frequently spend on gas and healthcare.
- AARP Members: Existing members can maximize their benefits.
- Individuals Who Travel Internationally: No foreign transaction fees make it useful abroad.
If your spending aligns with the reward categories and you prefer no annual fee, this card could be a strong option.
Tips to Maximize Benefits
- Use the Card Strategically: Focus spending on gas and healthcare to optimize cashback.
- Pay the Balance in Full: Avoid the high-interest charges by clearing balances monthly.
- Take Advantage of AARP Perks: Use related discounts and offers to add further value.
- Monitor Credit Score: Utilize the free FICO score to keep track of financial health.
Conclusion
AARP credit cards can be an excellent tool for those who fit the target demographic and have spending habits that align with the reward structure. However, they may not be the best choice for everyone, especially those who prefer broader cashback categories or lower interest rates. Evaluating your spending habits, financial goals, and other available cards will help determine if the AARP credit card is the right fit for you.
