Retirement brings a great many things, but an increased income is usually not one of them. Learning to live on a fixed income, one that is probably less than they were used to, can be quite a jolt for some seniors, and a re-examination of their finances is definitely called for before anyone gives up working for good. If you are approaching retirement the time to take a look at your personal financial situation is now, especially the way you use your credit cards.

Pay off the Debt You Have

Becoming a retiree does not have to mean giving up your credit cards altogether. Your golden years are supposed to be just that, the time you get to enjoy yourself a little after all those years of hard work. Taking a look at the way you use the credit cards you have, and exploring the other options available to you though can help ensure that the financial side of your life remains healthy, so that you can pursue some of the things you have been dreaming about for years.

The best course of action for new retirees when it comes to their existing credit cards is to pay off the current credit card debt as soon as they can. The high interest rates attached to most credit cards, coupled with an increasing number of fees that are being levied by lenders, can add up to a monthly minimum payment that quickly becomes worrisome to those on a fixed income.

If you can afford to pay off your credit card debt in full you can avoid getting back into too much debt after doing so by learning to treat your credit cards more like charge cards. Paying off credit card balances in full every month means you will keep your spending in check and avoid having to pay all those interest fees. This method also makes sticking to a monthly budget easier, something that all those on a fixed income should be trying to do.

Evaluate Rewards Programs

Once you stop working, and your lifestyle and income level changes, you may want to give some thought to just how suitable any rewards credit cards you already hold are for your new routine, and perhaps even consider looking for some new ones:

Travel Rewards Credit Cards

If you intend to travel more now that you actually have the time, a travel rewards credit card might come in very handy. These types of credit cards can be rather difficult to use though. The rules for rewards redemption can be a little hard to follow and when you can actually use those air miles may not be very convenient. It can also literally take years to accrue enough air miles or travel points to secure the trip you want.

A better choice for seniors who travel frequently may be a rewards credit card from an airline or hotel chain they use frequently. Such cards tend to offer seniors discounts rather than out-and-out freebies, which can, in the long run, prove far more useful.

Cash Rewards Credit Cards

If frequent travel is not really on your agenda as a retiree, you may get more out of using a credit card that offers cash back rewards. If you are on a fixed income the little cash boost that many of these cards provide once in a while can be very welcome. Before signing up for such a credit card make sure that you understand the rules attached to the rewards structure though. Some cash rewards credit cards have a cap on the amount cardholders can accrue every year.

For example, a certain credit card may advertise 5% cash back on all purchases but if you examine the offer carefully you may find that rates drop after you reach a certain dollar amount.

Store Rewards Credit Cards

An increasing number of major shops are now issuing their own rewards credit cards in addition to the traditional charge card offerings. The payoff from choosing to use such cards usually comes in the form of cash back that can only be spent at that particular store. However, if there is a certain store that you frequent all the time – a large supermarket for example – this type of rewards credit card may be the most useful of all.

Read the Fine Print Carefully

If you do decide to apply for a new rewards credit card, ensure that you understand all the terms and conditions attached to it before you sign up. Some rewards structures can be very complicated and difficult for anyone to understand and what looks like a great programme on the surface may not be so wonderful when you take high annual fees or excessive restrictions into account. The details about those kinds of things are usually tucked away in the fine print at the bottom of application, so make sure you take the time to read it all carefully.

Ask for A Better Deal on the Credit Cards You Have

If you discover that the terms attached to your current credit cards are not so favourable anymore it can be tempting to apply for a new credit card and transfer the high interest balance to that. The difficulty is that once you are a senior on a fixed income it can become more difficult to get approved for these low interest credit cards at all. Trying to get a better deal from the lender you already have credit cards with is often a far better idea.

Much of the time, all it takes is a phone call to your credit card company asking for an interest rate cut to secure one. If your account is in good standing, and you present your case reasonably, most lenders will grant a rate cut on the spot. It is unlikely to be a huge cut, but every little bit tends to count for quite a lot when you are living on a fixed income.

This article was written by personal finance writer Timothy Ng from Sydney, Australia. He is genuinely passionate about helping people compare credit cards and helping them through researching to find the best credit card.