Retirement and Credit Card Debt

When you reach retirement age, it’s generally a fact of life that your income will drop – sometimes dramatically – and it’s a good idea to review all your finances, particularly credit card debt.

That’s because credit card debt is often the debt attracting the highest interest rate, so paying it off as soon as possible becomes a very bright idea. Sometimes you’ll be advised to pay off low interest debt first because it gives you a good sense of momentum, of making progress towards becoming debt-free.

Pay High Interest Debt First

There’s some truth in that, but paying off the really high interest debt first means you get rid of those obligations as soon as possible. Not only that, it makes sense to pay those big debts while you’re still earning, because it becomes much more difficult after you’re retired and you’re on a fixed lower income.

If that happens, you may be forced to delay your retirement date or else pick up another job with another company. Becoming a night watchman on a muddy building site at the age of 65 may not have featured large in your retirement plans, but you may be forced to consider it as an option if your credit card debt is still hanging around after the retirement party.

It’s a fact of life that credit card companies won’t be as eager as they were previously to refinance your credit card debt using low interest cards because they do take your age and earning power into consideration when assessing you as a credit risk.

Set A Debt Target

When confronting credit card debt, start by setting a target for when the debt has to be repaid. At the same time, implement a discipline plan so that you spend less than you earn.

Over your working life, you’ll have become accustomed to buying at a certain level but you’ll have to retrain those habits to match your new income and debt levels. Don’t rely on your savings to cover the gap between income and debt. You’ll be amazed at how quickly those savings can evaporate if you don’t cut back your spending levels.

Credit Cards Still Useful

None of this means you should give up credit cards entirely in your retirement. They are still very useful if you want to buy goods over the Internet or through mail order catalogues. You’ll find those sources often offer cheaper prices than going down to the local shopping centre.

Check out today's featured offers:

Citibank Clear Platinum	Qantas AMEX Discovery	ANZ Platinum	Westpac Low Rate
2.9% p.a. for 12 months on balance transfers	$0 annual fee Up to 10,000 Bonus QFF Points	0% p.a. for 6 months on purchases & balance transfers	0% p.a. for 6 months on purchases & balance transfers

Subscribe to our newsletter and get "The Ultimate Guide to Balance Transfers"

Popular Credit Card Offers

			Interest Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Cash Advance Rate (p.a.)
	Citibank Clear Platinum Card	Competitive interest rate on purchases and balance transfers offer.	11.99%	2.9% for 12 months	$99	21.74%
	St George Vertigo	Take advantage of this great offer from St.George with a low rate on purchases and a low balance transfer offer.	13.24%	0.99% for 12 months	$55	21.49%
	ANZ Platinum Credit Card	An introductory interest rate offer on balance transfers and purchases, plus a $0 first year annual fee.	0% for 6 months (reverts to 19.24% )	0% for 6 months	$0 annual fee for the first year( $87 thereafter)	20.99%
	American Express Qantas Discovery Card	Earn Qantas Frequent Flyer points, plus take advantage of the no annual fee offer.	20.74%		$0	20.74%