WARNING: The 2013 AARP credit card has improved but it still has drawbacks. Please read this review before submitting your application for their new Visa Rewards card.
Quick Overview For 2013: Issued by Chase, the AARP Visa is an improvement over earlier versions. It now gives 1% on regular purchases and 3% on eligible travel purchases. The APR is a bit high at 16.24%.
Who Should Get It? If you travel extensively then the new rewards program makes sense. But if you don't, it's not worth getting. If you would rather earn high cash back on everyday purchases like gas and grocery stores, then I would recommend a different card instead.
Originally called the American Association of Retired Persons, they changed their name a few years ago to just AARP. This better reflects their organization, since membership is available to everyone over the age of 50, regardless of whether or not they’re retired. Even though they’re technically a non-profit, many feel they have drifted from their roots by peddling financial services like insurance, investments, and the AARP credit card.
AARP has come under intense attack over the past few years over some of these financial products which seem to be benefiting AARP more than its actual members. For example back in 2008, according to Wikipedia, AARP made $652 million in royalties from insurance companies for just that year. Unfortunately, they are “limited benefit” plans according to Sen. Grassley, senior Republican on the Senate Finance Committee. So is their credit card also a "limited benefit" card? Let’s take a closer look…
AARP Credit Card Review
The are 2 different classes of this card:
- AARP Visa card - This was a huge disappointment because it offered no rewards and very few benefits. The good news however is that this version was discontinued back in 2011, however there may be existing cardholders who were grandfathered in with it. If that's you, I would recommend converting it to the newer program so you at least earn some rewards.
The latest version of the AARP Chase credit card (launched in 2011) is much better than in the past. Why? Because the rewards have been increased and there are a few new benefits.
- AARP Visa with rewards - This is the version that has rewards and to the best of my knowledge, it is the only AARP credit card offer you can apply for now. I commend them for doing this because the Platinum Visa (without rewards) was a bad deal.
Here's how the program currently works:
What are the drawbacks?
- No annual fee
- A straight 1% cash back on purchases. This is a lot more transparent than the point-based system of the past.
- There's 3% cash back on eligible travel purchases. So what do they classify as "eligible" for this category? Well if you review the fine print on the application you will see it consists of the following: airlines, cruise ships, passenger railways (excluding local and commuter trains, lodging, travel agencies, and car rental agencies (excluding truck, trailer, and RV).
- The newly added benefits include purchase protection, price protection, return protection, and extended warranty. However these have some drawbacks, which I will discuss in a moment.
- The standard purchase APR is now 16.24%. Even though I wouldn't necessarily consider this to be a "low" interest rate, it is reasonable, and more clearcut than the previous multi-tier rates which ran from 13.24 to 19.24% (which depended on your credit score and history).
Even though the latest credit card deals from AARP are much better than in the past, there are a few drawbacks you should consider.
- Only 1% on regular spending. This is good, but not great. It's possible to earn travel rewards worth 1.25% with the Capital One VentureOne.
- The 3% bonus category won't benefit everyone. If you travel a lot, then the Chase AARP credit card is the way to go. But how about those who don't travel much? You might be better off with a gas and grocery rewards card instead.
- Some benefits have more restrictions. For example the Purchase Protection benefit is common on many types of credit cards. The rules vary by card, but usually it covers purchases for 90 days from date of purchase, up to $1,000. However the AARP Visa card only covers eligible items for 60 days and the ceiling is $250 instead of a $1,000.
In my previous review, I was very clear with how disappointed I was and said that senior citizens deserved to be treated better. So does the new version deliver? Is it now a credit card deal that's fair and respectable? I would say yes, it is now worth considering.
If you travel a lot, then the AARP Rewards Visa should definitely be something you should consider. There is no minimum age to apply for the card, so even if you are below 50 I believe you can still submit an application. However make sure you compare it to my other travel rewards card reviews because depending on your spending patterns, there may be better offers available for you.
By the way Chase had a promotion for the AARP credit card with 5% cash back on all purchases for the first 6 months. This was an excellent offer - but unfortunately - it was only offered during the start of 2011 when the new version first launched. To the best of my knowledge, you can no longer get that offer. Now it's an offer for $100 after spending $500 within the first 3 months.