Monday, July 22

7 Best Credit Cards to Maximize Your Retirement Income

In the world of points, we’re constantly trying to get as many valuable points as possible. This is especially true when it comes to credit cards that help you earn them. Trying to figure out which card is best to use for each bonus category can definitely drive you crazy. In fact, you’ve probably wondered why you can’t have one credit card that would cover every type of expense.

That would probably happen in an ideal world. Of course, you may have a go-to card such as the American Express Gold Card if you go grocery shopping and eat out a lot, but what about other types of purchases?

It’s worth mentioning that there are lots of everyday expenses that don’t fall into the rewards category. In other words, you need to have a credit card for day-to-day purchases, also known as miscellaneous purchases.

As long as you can pay off your balance in full and on time each month, it can be useful to use a credit card when making basic purchases. Using a credit card that offers points, miles, or cash back on your daily purchases is a great strategy to make your rewards balance increase even more quickly.

While many popular cards are specially designed to reward travel enthusiasts, there are several that are more geared towards rewarding day-to-day purchases, such as grocery runs, online shopping, and gas fill-ups.

During this period of high inflation, you may find that these types of rewards aren’t just a bonus, but a necessity. According to a recent survey, half of Americans with rewards credit cards claim they are relying on these types of bonus points to ease the burden of inflated costs. This is a great strategy, especially for retirees looking for ways to save money.

To help you find the best card for earning rewards and maximizing your retirement income, we’ve made a list of some of our favorite picks. Let’s get started!

american express
Photo by Hiram Rios from Shutterstock

1. Best Overall – Blue Cash Preferred Card (American Express)

The Blue Cash Preferred Card is part of the American Express product line. It’s ideal if you want to earn a respectable amount of bonus points across a wide range of common spending categories. You can earn cash back on everything from groceries to transit, gas fill-ups, streaming subscriptions, and more. No wonder it is one of the most popular cash-back credit cards.

As you use the card, you’ll earn rewards in the following bonus categories: 6% cash-back on certain US streaming subscriptions; 6% cash-back on groceries and other types of purchases at US grocery stores and supermarkets (up to $6,000 per year); 3% cash-back at gas stations all over the country; 3% cash-back on transit, including trains, buses, parking, tolls, taxis, rideshare, and more; 1% cash back on other types of purchases that don’t fit into the categories listed above.

But that’s not all. The Amex card comes with a welcome offer where you can receive a $250 statement credit after spending $3,000 in purchases. The offer only applies within the first six months of your card application.

The card also comes with other valuable benefits such as Equinox+ credits, Disney Bundle Credits, an intro 0% APR offer for 12 months on purchases (after, 18.74% – 29.74% variable APR), and return protection (you may need to enroll for select benefits).

2. Best for Earning Cash Back – Citi Double Cash Card

The Citi Double Cash Card is a cash-back credit card that comes with no frills, making it the best choice if you want to quickly save on your monthly expenses. It has a feature that some people may find very useful (although we don’t recommend taking advantage of it too often): if you forget to pay your bill, the bank will waive your first late fee.

As you use the credit card, you’ll earn 2% cash back split into two parts: 1% when you make the eligible purchase and the rest after you pay your bill. Another thing that’s great about this card is that the bank puts no limit on how much cash back you can earn. In other words, purchasing more means more rewards.

The rewards are awarded in Citi ThankYou points, which can be redeemed for gift cards, cash back, merchandise, statement credits, or travel. And if you have another credit card that offers Citi ThankYou points, like the Citi Premier Card, you can combine your points and transfer them to various travel partners.

3. Best for Earning Travel Rewards – Chase Sapphire Preferred Card

Since we’ve mentioned the word “travel”, let’s see more about this credit card. According to financial experts, the Chase Sapphire Preferred Card is the best credit card for travel enthusiasts. If you’ve decided that retirement is the best time to explore the world, then this card is for you!

As one of the most popular credit cards for travelers, the Chase Sapphire Preferred Card comes with lots of perks, including a low annual fee and broad spending categories.

As you use the card, you’ll earn: 5X points on travel purchased via Chase Ultimate Rewards; 5X points per $1 spent on Lyft rides (the offer is available until March 2025); 3X points on online grocery shopping (excluding Walmart, Target, and wholesale clubs); 3X points on dining, including qualifying takeout, dining out, and delivery services; 3X points on eligible streaming services; 2X points on other types of travel purchases; 1X points on other types of purchases that don’t fit into the categories from above.

Additionally, you can receive 60,000 bonus points if you spend $4,000 on purchases within the first three months of your card application. The bonus is worth $750 when redeemed for travel through Chase Ultimate Rewards.

If you love traveling, the credit card comes with amazing travel benefits, including comprehensive travel insurance, a $50 annual Ultimate Rewards Hotel Credit, and no foreign transaction fees.

As you use the card, you’ll earn points. These bonus points can be redeemed for gift cards or cash back at a 1-cent per point rate. You can add 25% more value to your points when using them on the Chase travel portal. You can potentially increase even more the value of your points by transferring them to one of Chase’s hotel or airline partners, like United MileagePlus and World of Hyatt.

american express
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4. Best for Groceries and Dining – American Express Gold Card

The American Express Gold Card is perfect for foodies looking for ways to earn Amex Membership Rewards points.

Here are the points you can earn by using this credit card: 4X points for every dollar spent on groceries at all supermarkets in the country (up to a limit of $25,000 per year in purchases, then you’ll earn 1X); 4X points per every dollar spent at restaurants all over the world, plus delivery and takeout in the US; 3X points per every dollar if you book flights directly with the airline or on; and 1X point per every dollar spent on all other types of purchases.

While the credit card comes with a $250 annual fee, there are plenty of benefits that can help offset the cost. Some of them are travel insurance, monthly Uber credits, dining credits at select restaurants, and special discounts when booking hotel stays on The Hotel Collection platform (enrollment required for select benefits).

You can also participate in Amex Offers, which can help you earn bonus points or statement credits at select retailers.

The credit card is currently offering new cardholders the following welcome bonus: 60,000 points after spending $4,000 on qualifying purchases within the first six months of account opening.

You can get the most out of Membership Rewards points by transferring them to one of Amex’s various hotel and airline partners, such as JetBlue or Delta Air Lines. You can also redeem them for gift cards, statement credits, or when purchasing from retailers like Amazon, though your points will usually be worth less.

5. Best for Gas – Citi Custom Cash Card

The Citi Custom Cash Card is an awesome option for your gas purchases, but it can help you earn some bonus points on daily purchases too. Additionally, there’s no annual fee, which is great.

By paying with this credit card, you’ll earn: 5% cash back on purchases classified in the top eligible spending category, up to a limit of $500 per billing cycle (then 1%); 1% cash back on all purchases that don’t fall into the top eligible spending category (no limit on rewards).

Eligible spending categories include gas stations, grocery stores, restaurants, select streaming services, select transit, drugstores, select travel, fitness clubs, live entertainment, and home improvement stores.

If you tend to spend a lot of money on gas or other qualifying categories, you can end up earning up to $25 in cash back each billing cycle. However, if you find yourself exceeding that $500 threshold often, you may consider adding a second gas rewards credit card into the scheme, such as the PenFed Platinum Rewards Visa Signature Card.

The Citi Custom Cash Card also has a welcome bonus. The bank gives you an extra $200 in cash back if you spend $1,500 in the first six months of opening the account.

You can redeem your bonus points as a direct deposit, statement credit, travel gift card, or even on Amazon orders.

6. Best for Rotating Bonus Categories – Chase Freedom Flex

The Chase Freedom Flex is a great option for flexible spenders who want to earn generous amounts of cash back. Whether you’re sprucing up your patio with purchases from Lowe’s or ordering spring cleaning supplies and a fresh new wardrobe from Amazon, you’ll be able to earn 5% on your purchases when paying with your Chase Freedom Flex credit card.

The 5% is quite good, if not one of the highest amounts offered by a cash-back reward credit card. But that’s not all. There are other categories where you can earn money. So, as you use the card, you’ll earn: 5% cash back on the rotating categories (each quarter has different categories and they need activation); 5% cash back on travel-related purchases made through Chase Ultimate Rewards’; 3% cash back on drugstore purchases; 3% cash back on restaurant purchases, including takeout and qualifying delivery services; 1 cash back on purchases that don’t fit into the categories listed above.

The credit card also comes with an intro offer of 0% APR, which is available for the first 15 months of account opening (after, 19.49% – 28.24% variable APR).

There’s also another offer for new cardholders: if you apply for the card, you can earn $200 cash back if you spend $500 on purchases within the first three months of card membership. There’s more, though. The card comes with no annual fee, so overall, it’s a great option that’s pretty hard to beat.

The cash-back you earn can be redeemed for travel, gift cards, a statement credit, and other items, just like the other credit cards on this list. Plus, if you have another cash-back card from Chase, like the Chase Sapphire Reserve or Chase Sapphire Preferred Card, you can potentially get much more value from your points. All you have to do is convert the cash back into Ultimate Rewards points, which are transferable.

amazon credit card
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7. Best for Online Shopping – Amazon Prime Rewards Visa Signature Card

If you’re someone who regularly shops on Amazon, it’s hard to find something you don’t like with the Amazon Prime Rewards Visa Signature Card. The credit card, issued by Chase, can help you earn a pretty stellar rate of rewards at both Amazon and Whole Foods.

And unlike many other store-branded cards, this one can be used to earn bonus rewards anywhere that accepts Visa. You’ll enjoy rewards at restaurants, gas stations, and drugstores, too. Additionally, redemption options are pretty flexible for a store card.

You’re probably wondering how much the fee that comes with this credit card is. There is good news, though, as everything that the card offers comes with no annual fee. However, you need to have an Amazon Prime membership to apply for this card.

So, if you’re an Amazon Prime loyalist, this card is for you. But if you don’t shop enough on Amazon to offset the membership fee, you should probably look elsewhere.

As you use the card for purchases, you’ll earn: 5% cash-back on everything you buy at Whole Foods; 5% cash-back on online orders or in-store purchases at Amazon; 2% cash-back at gas stations, restaurants, and drugstores; 1% cash-back on all other purchases.

The Amazon credit card also comes with a simple welcome bonus. You apply for the card, you get approved, and you instantly earn a $100 Amazon gift card.

The cashback you earn comes as points, which are worth 1 cent each. You can use them for eligible purchases at the Amazon website or redeem them through the Chase portal for gift cards, travel, and cashback.

Should you use a credit card for day-to-day purchases?

By using a credit card for day-to-day purchases, you can earn valuable rewards pretty quickly. However, it’s very important to stick to a budget and always pay your bills in full and on time.

How can I get the most out of my credit card?

You can get the most out of your credit card by finding one that matches your spending habits. Also, if your spending habits change, it’s recommended to switch cards so you can earn more rewards.

Which card should I choose for day-to-day purchases?

The best credit card for day-to-day purchases is one that most closely matches your financial goals and purchasing habits.

Bottom Line

Everything has gotten more expensive, leaving many Americans struggling to find ways to save money. Although it may seem counterintuitive to save money by using a credit card, that’s a financial tool that provides a solid opportunity to purchase what you need while earning rewards.

However, financial experts point out that a credit card should always be used in tandem with your monthly budget. Overspending and eventually getting into credit card debt will result in financial problems, and the rewards you’ll earn won’t make any difference.

When it comes to bonus categories, nowadays they are better than ever before. The value you can earn from your non-bonused spending has improved considerably too.

If you ensure you’re using the credit card wisely, you truly can’t go wrong with any of the options listed above. As a general rule of thumb, make sure you choose one earning at least 2% cash back or a minimum of 1.5X points per every dollar spent.

You may also want to read New to Retirement? AVOID These 9 Bad Budgeting Habits.

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