How to get a credit card as a pensioner

Find out the pros and cons of getting a credit card if you're retired, and compare cards now.

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Table: sorted by representative APR, promoted deals first
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Name Product Finder score Purchases Balance transfers Annual/monthly fees Representative APR Incentive Link
Royal Bank of Scotland Purchase & Balance Transfer Credit Card
Royal Bank of Scotland Purchase & Balance Transfer Credit Card
4.0
★★★★★
0% for 19 months reverting to 24.9%
0% for 19 months
(2.99% fee)
£0
24.9% APR (variable)
Representative example: When you spend £1,200 at a purchase rate of 24.9% (variable) p.a., your representative rate is 24.9% APR (variable).
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NatWest Purchase & Balance Transfer Credit Card
NatWest Purchase & Balance Transfer Credit Card
4.0
★★★★★
0% for 19 months reverting to 24.9%
0% for 19 months
(2.99% fee)
£0
24.9% APR (variable)
Representative example: When you spend £1,200 at a purchase rate of 24.9% (variable) p.a., your representative rate is 24.9% APR (variable).
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HSBC Purchase Plus Credit Card
HSBC Purchase Plus Credit Card
4.0
★★★★★
0% for 18 months reverting to 24.9%
0% for 16 months
(3.49%, min £5 fee)
£0
24.9% APR (variable)
Discounts and exclusive offers for dining experiences, leisure activities and shopping available through HSBC Home and Away.
Representative example: When you spend £1,200 at a purchase rate of 24.9% (variable) p.a., your representative rate is 24.9% APR (variable). You might get different interest rates and promotional periods to those shown here, because these depend on your circumstances.
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Santander All in One Credit Card
Santander All in One Credit Card
4.5
★★★★★
0% for 15 months reverting to 23.9%
0% for 15 months
(0% fee)
£3 per month
29.8% APR (variable)
0.5% after £1 of monthly spend. Maximum of £10 cashback paid per month. Cashback paid Monthly into Card Account. Maximum spend for cashback purposes is limited to credit limit.
Representative example: When you spend £1,200 at a purchase rate of 23.9% (variable) p.a. with a fee of £3 per month, your representative rate is 29.8% APR (variable).
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Name Product Finder score Finder score Max. intro bonus Earn-rate with brand Default earn-rate Annual/monthly fees Representative APR Incentive Link
M&S Bank Credit Card Transfer Plus Offer Mastercard
M&S Bank Credit Card Transfer Plus Offer Mastercard
4.0
★★★★★
★★★★★
Expert analysis
N/A
1 point per £1 spent
1 point per £5 spent
£0
24.9% APR (variable)
1 point per £1 spent with M&S and 1 point per £5 spent elsewhere. Enjoy 55 days interest free, preferential rates plus no cash advance fee when buying M&S travel money with the card.
Representative example: When you spend £1,200 at a purchase rate of 24.9% (variable) p.a., your representative rate is 24.9% APR (variable).
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Santander All in One Credit Card
Santander All in One Credit Card
4.5
★★★★★
★★★★★
Expert analysis
N/A
0.5% cashback
0.5% cashback
£3 per month
29.8% APR (variable)
0.5% after £1 of monthly spend. Maximum of £10 cashback paid per month. Cashback paid Monthly into Card Account. Maximum spend for cashback purposes is limited to credit limit.
Representative example: When you spend £1,200 at a purchase rate of 23.9% (variable) p.a. with a fee of £3 per month, your representative rate is 29.8% APR (variable).
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NatWest Reward Credit Card
NatWest Reward Credit Card
3.5
★★★★★
★★★★★
Expert analysis
N/A
1 point per £1 spent
1 point per £4 spent
£24 per annum. Reward Current Account holders: £0 per annum
31% APR (variable)
You'll earn 1% back at supermarkets and 0.25% back everywhere else, including supermarket petrol stations. At selected retailers, you could earn 1-15% back.
Representative example: When you spend £1,200 at a purchase rate of 25.9% (variable) p.a. with a fee of £24 per annum. Reward Current Account holders: £0 per annum, your representative rate is 31% APR (variable).
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American Express® Rewards Credit Card
Finder Award
American Express® Rewards Credit Card
4.0
★★★★★
★★★★★
Expert analysis
10,000 points
1 point per £1 spent
1 point per £1 spent
£0
31% APR (variable)
Earn 1 Membership Rewards® point for every £1 spent thereafter. Earn up to 90,000 bonus points per year through refer a friend, 4,000 points awarded for every friend approved. 1 point = 0.45p (min 1,000 points) to shop, other rewards have differing conversions.
Representative example: When you spend £1,200 at a purchase rate of 31% (variable) p.a., your representative rate is 31% APR (variable).
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Approval for any credit card depends on your status. The representative APRs shown represent the interest rate offered to most successful applicants. Depending on your personal circumstances, the APR you're offered may be higher, or you may not be offered credit at all. Fees and rates are subject to change without notice. It's always wise to check the terms of any deal before you borrow. Most of the data in Finder's comparison tables is provided by Moneyfacts.

Can I get a credit card as a pensioner?

Yes, you can still get a credit card or open a credit account if you’re a pensioner or simply retired. Used responsibly, credit cards can offer pensioners specific benefits and perks you can’t get with debit cards. However, the change in your financial circumstances that comes after retiring can affect your chances of being approved for a credit card. Make sure you use an eligibilty checker before you apply.

Retirement is usually a time of major changes to your finances, as you’re likely to have paid off the mortgage, but no longer earning a salary. While you’ll generally have a lower income after retirement, you’ll also not have mortgage repayments, commuting costs, car finance or dependants to worry about.

Card issuers will consider applications for a credit card as long as you meet their basic eligibility requirements. In order to approved your application, they’ll need to be satisfied that your retirement income (such as your pension, any part-time job or any investment income) will be enough to cover your potential credit repayments.

They’ll also run a full search of your credit record. You may have worked hard to clear your debt, but lenders actually like to see recent responsible use of credit when they’re evaluating risk.

When you are offered a card, your credit limit could be smaller than you expected, or than when you were working. This can be due to factors such as a reduced income, or less recent history of responsible borrowing in your credit file, but use the card responsibly and this limit can be reviewed and increased in future.

Should I get a credit card if I’m retired?

Before applying for a credit card, you should ensure that your current financial position would allow you to cover any interest charges that come about from using the card. Credit cards should never be considered a “top-up” for your pension and you should be sure that you can pay off your balance every month, or within a short period of manageable payments.

Provided that you don’t expect to carry a balance from month to month over the long-term, then a credit card can offer worthwhile benefits:

4 benefits of getting a credit card if you’re retired

  1. Rewards. Receive cashback or points for your everyday spending or bigger purchases. These rewards could be redeemed in-store (such as on your grocery bill or new clothes), or on a hotel or flight for your next holiday.
  2. Avoid foreign transaction fees. You could avoid extra charges on your next trip, with the right card.
  3. Added protection. Things you buy on a credit card are protected in a way that they aren’t if you use a debit card. If your item is faulty or not as advertised, or the retailer goes bust, the credit card company is jointly responsible along with the retailer for making sure you’re not out of pocket. This is due to section 75 of the Consumer Credit Act 1974, which states that on purchases of single items worth between £100 and £30,000, the provider is jointly liable with the retailer if you don’t get what you paid for. Although debit cards are widely accepted in shops and businesses, they do not offer this protection.
  4. Flexibility. Unlike debit cards, where the money is taken from your account immediately, you usually have up to 56 interest-free days on items purchased on your credit card, giving you more time to manage and finance your expenses.

Another less obvious benefit to using a credit card is that you’ll continue to demonstrate that you use credit wisely – which is likely to benefit your credit score. Perhaps this won’t be a significant advantage for you if you’re not anticipating additional borrowing down the line, but for some, if the mortgage has been paid off and they aren’t using other loans like car finance, there may not be much in the way of responsible credit use being recorded on their credit records.

How do you get a credit card as a pensioner or retiree?

You’re looking to apply for a credit card as a pensioner or retiree, here are some basic steps of how the process works.

  1. First step would be to research. Research what card type you would need and compare a range of credit cards to find the right fit.
  2. Check the provider’s eligibility criteria. Most, if not all, credit card providers will outline the eligibility requirements for their products. And nowadays, they even provide a free eligibility checker before you apply. This checker will run a “soft credit check” on your credit report, meaning that it will not impact your credit score.
  3. Apply for the card. Once you have found your product, completed the eligibility check and read the card’s terms, all you need to do now is apply for the credit card.

Mistakes to avoid when applying for your credit card

  • Applying without researching. Rejected applications can negatively affect your credit report, so be sure to confirm the information you’ll need to increase your chances of approval. Read the terms and conditions or contact the provider to answer any questions you have before applying.
  • Making multiple applications. If you’re rejected for a credit card application, don’t immediately apply for another one. Instead, consider why your application was denied. If you didn’t submit the required documents, find out which ones you’re missing. If you were rejected because of your credit history, you’ll need to take some time to improve your credit score before applying again. Each time you submit an application for credit, lenders will run a “hard” search of your credit file. A hard credit search usually has a small (and typically short-lived) negative effect on your credit score. Most lenders now offer a “soft” search facility, so that you can check your eligibility without affecting your credit score.
  • Opting for 0% deals on impulse. You may be tempted to apply for a balance transfer or purchases credit card with a 0% interest period over an introductory period. While these deals may appear attractive, they encourage you to spread your debt over time, which isn’t necessarily the best decision for a pensioner. At the end of any promotional period, the card’s standard rate applies, which is typically much higher. Some providers may not offer these types of cards to pensioners.
  • Paying fees. Some cards charge an annual or even monthly fee. Occasionally the account fee might be worth paying, for example if the rewards you would earn outweigh the fee. However, as a general rule you should seek a credit card without regular fees that could eat into your income.
  • Spending beyond your means. As a pensioner, your income is unlikely to increase much year on year. Make sure you can pay off your balance in full every month, or clear your balance in smaller payments within a short space of time (such as a few months).
Credit card application tips
Documents for your application

How should I choose the right type of credit card?

When considering opening a credit card, you should think about what you would use it for. Is it for everyday spending in a bid to attract rewards? Are you trying to avoid hefty currency conversion fees for your next holiday? Here are some of the most popular reasons for taking out a credit card in retirement:

  • Purchases. Are you planning a large purchase? Perhaps a new kitchen or a shed? A credit card with a low or 0% interest rate on purchases could help you spread the cost. Don’t forget that 0% periods are invariably followed by the card’s standard rate, so you should aim to clear your balance before this kicks in.
  • Overseas spending. Most credit and debit cards charge a currency conversion fee of around 1-3% when you withdraw money abroad, and over the course of a holiday these fees can start to add up. With more countries moving closer to becoming cashless societies, the increasing reliance on cards means foreign trips could get even more expensive in future. However, some credit cards don’t charge fees on non-sterling transactions, meaning you can shop on holiday without the extra charges.
  • Rewards. If you want to be rewarded with points or cashback, then a rewards card is the way to go. Rewards cards come in the form of cashback cards (where you get money in your account), frequent flyer cards (you receive points which can be redeemed on travel) or other rewards cards (you receive points which can be spend on shopping, travel and experiences). To get the most from these cards you should use them for as much of your spending as you can, but clear the balance in full each month (otherwise the cost of interest could outweigh any rewards you might earn).

What features should I look for in a credit card?

  • A low interest rate. If you’re eligible for a 0% introductory interest rate on balance transfers or purchases, be aware the card will revert to a higher rate after the period ends. Alternatively, you may want to consider a low interest rate card.
  • No fees. You don’t want to be wasting your pension on fees, so you’ll most likely want to choose a credit card with no annual fee. Some providers offer the first year free, but then can revert to a high annual fee, so make sure you check the full terms and conditions. All card issuers must publish a “summary box” for each credit card, and this can sometimes be the quickest way to cut through the marketing speak and find out the key details of a credit card.
  • Perks. Even if you’re not specifically looking for a rewards card, that doesn’t mean perks are off the table. Most supermarkets now also offer a range of credit cards which allow you to accrue Nectar points, Clubcard points etc. on your day-to-day spending.
Credit card benefits and disadvantages
Different types of credit cards explained

Dos and don’ts

Do

  • Compare cards. Products have different perks, interest rates and charges, so find the card best suited to your needs. Although you may find it easier to open a credit card at the place you bank, it almost always pays to shop around.
  • Pay off your balance monthly. Credit cards give you flexibility over when you for an item, and allow you to spread the cost if you need to, but ideally you should be able to pay off the full balance every month.
  • Consider a second card just for holidays. If you want a main credit card to use for everyday spending and rewards, it may be worth taking out a second card without foreign transaction fees to use solely for your trips abroad. As with all your credit cards, make sure your spending on all cards is within your means and you can realistically pay off the balance in a short space of time. Just make sure it has no annual fees so you’re not paying for it when it’s sitting in your drawer at home.
  • Use a credit card for a large purchase. If something goes wrong with the item or the retailer goes bust, you are protected by Section 75 and are usually entitled to a refund. If you paid on the debit card, you would have little to no protection.
  • Maximise perks. Make sure you’re redeeming your credit card rewards, such as shopping vouchers, discounts or points. Be aware, many rewards have an expiry date or upper limit so it’s handy to use them often.

Don’t

  • Spend more than you can afford. It’s one thing spreading the cost of a large purchase or repair (such as a broken boiler), but you shouldn’t rely on your card to top up your pension.
  • Make multiple credit card applications. Repeated credit card applications will have a negative impact on your credit report.
  • Miss a payment. You could be hit with hefty interest or penalty fees if you miss a payment. It is usually worth setting up a direct debit from your bank account to avoid this.
  • Don’t spend your full credit limit. Just because you have a certain amount available to you to spend, doesn’t mean you should spend it all. Keep your spending within your means.
  • Withdraw cash on a credit card. Most credit cards charge a fee if you withdraw cash – both in the UK and abroad. This is called a cash advance fee and is usually based on a percentage of the sum being withdrawn. Details of rates for a credit card’s cash advance fee can be found in its summary box.

How to check on your credit card application.

Frequently asked questions

We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables is provided by Moneyfacts.

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2 Responses

    Default Gravatar
    MJBJune 30, 2019

    What is the maximum age by which a pensioner can apply for credit?

    Reply
      AvatarFinder
      BellaJune 30, 2019Finder

      Hi Mjb,

      Thanks for your inquiry.

      Maximum age in applying for a credit card will depend on bank requirements and discretion. You may read our article written above this page to see the information or guide in applying for a credit card as a pensioner.

      I hope this helps.

      Kind regards,
      Bella

      Reply
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