Let's talk about credit cards *duh duh duh*
Written by Glen James
Host of the Retire Right & money money money (formerly my millennial money) podcasts & author of The Quick-Start Guide to Investing.
I’ve seen some chatter in the Facebook group recently about credit cards, and one question stood out:
‘My credit card fee is going up considerably. I’m thinking of getting rid of it completely. My husband is keen to change to another credit card that has no fee if a minimum spend is made each month. That would still force us to spend. Retirement for us is not far away, and many people talk of the difficulty in getting credit once retired. We plan to travel overseas and wonder if everywhere accepts debit cards now. Thoughts?’
I have two answers:
Answer 1: Don’t get a credit card.
Credit cards are designed to make you spend more. Studies show people spend more on credit than cash or debit because there’s less "pain" in paying. That can lead to overspending—something you don’t want in retirement.
Many people start using credit cards for points but then rely on them for essentials. If you don’t pay them off every month, fees and interest add up quickly. Plus, credit limits count as debt, reducing borrowing power for things like mortgages.
If you know you’re a spendy person (hello, me), a credit card makes it easier to spend more than you should.
Answer 2: If you do get one, keep it under control.
Some people use credit cards for travel or points. If you go this route:
✅ Review your deal yearly—ensure the benefits outweigh the fees.
✅ Pay it off in full every month. If you can’t, rethink how you’re using it.
The concern about getting a credit card after retirement is real—lenders prefer income from work and are not likely to approve your application for a CC. But if you’re likely to overspend, think twice before keeping one at all.
What about emergencies?
I hear this a lot: ‘I need a credit card for emergencies.’ No, you need an emergency fund. Imagine facing a crisis and paying interest on top! If you’re using a credit card for emergencies, focus on building a cash buffer instead. Then, cut up the card and cancel the account.
Personal finance is personal. My take is if you don’t have a credit card, don’t get one. If you do, use it wisely. But never rely on it—you need to ensure you are in control of your spending habits.
Community question
Community member says: My daughter needs to replace her car but doesn't have enough money. We have the means to help, and everything I read and listen to says that the best way is to set up a formal loan with her. Has anyone done this, and how did you come up with the paperwork? I've also heard this helps protect them from a partner claiming half if we just give her the money.
Glen says: First up I’ll say it’s absolutely ok if you just want to buy your kids a car. If your relationship is strong, they’re responsible, and you have the means to comfortably buy them the car, go for it. This is 100% a situation of being generous if you want to.
If you’re considering structuring the help differently, here are three options and when they might make sense.
A Formal Loan Agreement – A good option if you want to provide financial help while maintaining clear boundaries. A formal loan means they’re responsible for repayments, reinforcing financial discipline. It also offers legal protection, as a loan (rather than a gift) may not be considered a shared asset if they enter a relationship. Proper documentation is key so speak with your solicitor.
Matching Their Savings Rate – A middle ground that encourages them to set a goal and budget while still getting a boost from you. For example, if they save $5,000, you might match it to help them afford a reliable car. This ensures they have skin in the game and don’t expect financial help to come easily.
Letting Them Save for It Themselves – If financial independence is the goal, having them save entirely on their own teaches long-term planning and delayed gratification. If they can work and save without undue hardship, this is a valuable character-building experience. You can still support them by helping research affordable cars or setting a realistic savings plan.
Ultimately, the right approach depends on your financial situation, your child’s responsibility level, and the values you want to instill. The key is to be intentional and use this as a financial growth opportunity.
Feel free to watch me and financial adviser Phil Thompson discuss this in person on YouTube. Phil has three daughters so no doubt this conversation will come up as his daughters get their licences and need cars:
