Credit cards are great for racking up rewards and points, but you want to ensure you have the right card for your spending style. There are many considerations when picking a card, and depending on your life stage, you may need to pick a new one. This article will look at several different factors to consider when deciding whether you should get a new credit card.
1. You Found a Credit Card With Special Sign-Up Bonuses
One of the best times to look for a new card is when special sign-up bonuses are offered. These introductory bonuses can be worth hundreds of dollars. Often, they come in the form of points or travel miles that you can redeem. Usually, these bonuses require the new cardholder to meet a spending goal within the first 30-90 days of opening the card. The goal is to get you to place money on the card so you can build up a balance. During these introductory periods, interest rates are lower than normal too.2. You Don’t Earn Rewards
Many older credit cards don’t actually offer rewards, so if you’re using a card with no reward system, it’s probably time to switch. You might also not be earning many rewards. If that’s the case, you should consider switching your card to a new one with better rewards. Evaluate spending and determine if you want cash back, dining, or miles rewards.3. Annual Fees Are Undercutting Your Card Benefits
If your card has a high annual fee, or the annual fee is eating up a big chunk of your rewards, it might be time to switch to a new credit card. Some cards, like the American Express Gold Card, have great rewards but also come with high yearly fees. Carefully consider the benefits of a card and whether or not the annual fee will make it worth it.4. Your Current Cards Have a High APR
One issue with credit cards is that they can have high Annual Percentage Rate (APR). Currently, the average credit card rate is at its highest since 1996. APR is the amount of interest you get charged every month. When you carry a balance, this is the amount that gets added to your card balance as interest. If you have a high APR, you’ll pay more interest every month. One way to avoid paying huge amounts of interest is to pick a lower-interest credit card.If you’re struggling with a high balance on a high APR card, then you can also utilize a credit card balance transfer to help you pay things off. This way, you can move your balance from one card to another (hopefully with a lower rate).
