If you’re debating whether to get a new credit card, there are some things you should consider. If you’ve been carrying around the same cards for a while you may think it’s not worth the hassle of applying for a new card. But the truth is you may be missing out on generous rewards, better terms, or worse yet – you might be throwing money away on fees and interest charges.
Here are five good reasons you might want to consider trading in your current credit card for one with more favorable benefits:
1) Your card is costing you money. If you’re paying interest fees every month, it’s definitely time for a new card. Finance charges eat away at your monthly payment plus they make it even harder to pay down your balance and eliminate your debt. Many credit cards today offer introductory 0% APRs on purchases and balance transfers- some for up to 18 months from when you open an account. Transferring an existing balance to a new card that charges no interest fees for a specific amount of time insures that your monthly payment goes directly totally towards your balance. Even better, it gives you some breathing room to hopefully pay off the entire balance within the introductory period.
2) It’s nearly impossible to use your travel rewards points because the dates you want are always blacked out. Seriously, what’s the point of earning travel rewards if you can’t ever use them? Look into travel rewards credit cards that offer flexible benefits with no blackout dates.
3) You don’t earn at least 2% back on every purchase. There are so many credit cards from which to choose and nearly all of them offer some type of rewards program. If you have a card that doesn’t pay you to use it- it’s time to switch! Look closely look at your spending habits and see where the bulk of your money goes every month- Groceries? Gas? Travel expenses? Entertainment? Some cards offer a specific percentage back on every purchase while others give higher rewards in certain categories. Whichever card you decide to get, make sure it delivers the highest rewards on the things you buy most often (and spend the most money on).
4) Your card has an annual fee. Some cards offer such great rewards (flight upgrades, free airline tickets, complimentary hotel stays) that the annual membership fee is easily worth it. But if you’re paying an annual fee for a card that you barely use (or doesn’t deliver superior benefits) you should definitely explore your options. And don’t think you have to have excellent credit to qualify for a rewards card. Many credit cards offer generous signup bonuses as well as introductory APRs to people with good or very good credit scores.
5) You don’t use credit cards. You may think it’s smart to not use credit cards but you really aren’t doing yourself any financial favors. If you ever want to buy a home (mortgage) or purchase a car (auto loan), or basically apply for any type of loan, you need a credit history. Lenders want to see that you can responsibly manage your debt over a long period of time. You may need to start with a secured credit card. But no matter what type of card you get, it’s important to only charge what you can afford to pay off in full each month. This allows you to earn rewards (when available), pay no interest charges, and maintain (or build) a solid credit score.