A lot of consumers want to know what the best credit card is for their credit report; whether they’re just starting out with credit accounts, or have utilized professional credit repair services to optimize their credit profile. And while we’ve blogged in the past about which type of card is best for those two specific situations, one area often overlooked is the age category – more specifically, the right credit card for the right age group.
Most people don’t even think about age being a factor in determining what credit card they should sign up for, but it certainly matters to credit card companies. That’s why it’s important to sign up for a credit card that caters to your current age group when you shop around.
I’m going to break it down for you by specific age group and detail why someone close to retirement wouldn’t benefit as much from the same card as a college kid would – much like how you never see the people in your grandfather’s retirement home waiting in line for a toga party.
The Campus Party Credit Card
There was a time when nearly everyone out of high school would be inundated with credit card offers as soon as they graduated. The Credit Card Act saw an end to that, and now companies are barred from marketing to anyone under the age of 21. This obviously means that new lines of credit – already hard to get when you’re just starting out – are even harder to get for the kids. You can still get a credit card if you’re younger than 21, but it’ll be with lower limits and terms that won’t exactly be in your favour.
When you’re young and just getting started in the credit game, you’re likely to have a score between 675 and 730, which would place you in the “near prime” card category. “Near prime” cards are good for consumers with good, but not great, credit. You can also apply for a secured credit card through a bank or credit union. You have to provide the deposit for the account, and the card works more like a debit than a credit card, but it reports to the credit bureaus just the same as a regular credit card, so you’ll still be able to build credit.
Your only other option if you’re a struggling college student looking for an easy way to pay for drinks is to try and piggyback onto one of your parents’ credit profile by becoming an authorized user on their card (I’d recommend against telling them you wanna use it to get sloshed though, but that’s me).
The Credit Card for the Singles Party
If you’re single and under 40, you want to be honest with yourself about how you’re going to use the card. If you’re the type to not leave a shopping centre without picking something up, you’re probably going to be paying interest on your credit card bill at one time or another. In that case, you’ll want to look for cards that have lower regular APR than others.
You can also look into opening a retail credit card. These aren’t exactly the best cards for your report, but when you’re still building your credit history, any help is better than none at all. Another option would be a gas card – they tend to offer better rewards credit card programs than your typical retail credit card.
If you’re single and over 40, well, there’s always Internet dating. As far as credit goes, it’s very likely that you’re not burdened with the normal level of expenses that comes with having a family, which makes you a prime target for credit card providers. Assuming you already have good credit, look for cards that offer interest rates of 10% or lower, or if higher rates don’t bother you, a nice rewards credit card program.
If you’re young and have a family of your own, you want a credit card that has rewards for common purchases, since you’re likely to be spending a lot more money than you would on your own. You’ll want a card that offers rebates on commonly purchased items like groceries. Any rewards credit card program that offers savings and earnings on gas or groceries is worth your consideration.
The “I Can Shout Louder Than You Can” Party
Parents with teenagers know how great of an adventure it can be to raise them, and how expensive it is to have them around. If this sounds like you, you may want to look into a retail credit card. The rates aren’t the best, but the rewards programs can be worth it, especially if your kid’s a frequent customer.
If you actually trust your teen aged son or daughter with money, you can help them get ahead of the credit game by piggybacking onto your credit card account as an authorized user. Doing so will help them learn more about using credit, and still give you the option to drop them once their ready for their own card.
Party For Two Credit Card
If you’ve sent the kids off to college and you’re worried about having enough money stocked away for retirement, consider looking into a rewards card that puts your points in a brokerage account or an IRA that’s tax-deferred. (not applicable in Canada, but you could deposit the rewards in a specific account ear marked for putting toward your RRSP) This way you’re not only saving money, but it’ll grow tax-deferred until you need it.
If you are paying down debts , you’ll want to tackle those now too, while you’re still working. If you still have cards active that you opened when you were younger that no longer fit with your lifestyle (like retail cards for kids that have gone off to college), consider switching to a card that fits you better now.
The Credit Card for your Retirement Party
Picking the right card here depends on what you want to do with yourself now that you’re free of the workforce. If you want to travel (and most retirees do), look for a travel rewards credit card that offer little or no fees for foreign transactions and lots of air miles / travel points. If you’re becoming more of a frequent face at the pharmacy, you might also look for cards with rewards for those purchases.
Now that you’re on a fixed income, you’ll also want to focus on cards with lower interest rates. Check with a local bank or credit union to see which offers the better rate for you.