According to a number of surveys, over 25 million consumers have had their favorite credit card for over 10 years. While keeping the same credit card for an extended period might be easy, chances are there are better options out there now that would suit your changing lifestyle better. Not sure whether you should look for a new credit card? Our tips below will help you decide.
- Your Interest Rate Is Very High. Before you switch to a new CC check with your provider if you can negotiate a better rate for your existing card. If your provider doesn’t work with you on this, be ready to transfer your balance to a new CC. Check internet for 0 interest balance transfer options.
- You’re Not Earning Any Rewards or Are Not Earning Rewards in Categories You Spend the Most Money For. If you had your CC for a while, there’s a chance you’re not earning rewards. Nowadays, so many cards provide rewards and there’s no reason why you shouldn’t benefit from them. Or, your card might be offering rewards but not for categories you spend the most money for. Say, you use your card the most for gas and groceries, but it only provides rewards for frequent travelers. Compare different options and chose a card that would be most beneficial for your needs.
- Your credit has improved Over Time. When you have bad credit, your credit card options might be limited. If, in the meantime, your credit has improved, there’s no reason why you wouldn’t want to switch to a better card.
- You Haven’t Received a Credit Limit Increase in Years. If your income and credit score have increased over time but your credit card limit didn’t, maybe it’s time for a new credit card. See if your favorite card provider is willing to raise your limit, otherwise walk away.
- You’re Paying an Annual Fee. Unless you cannot qualify for a better card, why pay the annual fee if there are so many cards where you don’t have to?
Should You Close Your Old Credit Card?
It’s generally best to keep your old CC open because the longer you have your account the higher your credit score. Even if you switch to a new credit card, use your old one periodically to keep it active. If you decide to close your old card because you want to stop paying an annual fee for it, make sure you pay off any outstanding balance before you close the credit card to avoid spiking your credit utilization.
Be Wary of Debt
Opening a new credit card also opens additional possibility for debt. Be careful to not overspend now that you have more than one credit card open. Continue to charge only what you can afford to pay in full each month even if you split that amount between your two CC.