Did you know that the average American has four credit cards? Credit cards have several benefits such as helping you to increase your credit score, earn rewards, give you a free credit report each month, and help you track your spending.
Because there are so many different credit cards out there, it is important to sign up for new ones when the time is right. Getting a new credit card will help you achieve different financial goals than your old credit cards have allowed.
How do you know when you should get a new credit card? Keep reading to learn about the five different signs that you should get a new credit card.
Your Credit Has Changed
One of the first signs that it is time to apply for a new credit card is if your credit score has recently changed. Credit cards are made for people at different stages of their credit journey.
If your credit score has improved, you can take advantage of the following benefits:
- Lower interest rates
- Better rewards
- Sign-up bonuses
- Higher credit limits
It doesn’t make sense to continue using credit cards without these benefits. You could save money by taking advantage of rewards and lower interest rates.
If your credit score has recently decreased, that also could be a sign that it is time for a new credit card. Certain credit cards are designed to help you rebuild your credit.
Keep in mind that applying for a new credit card could further impact your credit score. Anytime you apply for new credit, a hard inquiry is added to your credit report.
You Want Better Rewards
Credit cards come with tons of different rewards. If you don’t currently have a credit card with rewards or if you just want one with different rewards, it could be a sign that it is time to get a new card.
Here are some of the different rewards that you could get with a new credit card:
- Airline miles
- Cashback rewards
- Hotel discounts
- Gift cards
The type of credit card rewards that are best for you will depend on your lifestyle and preferences.
For example, if you are someone who loves to travel every chance you get, signing up for a credit card with travel rewards could save you money down the line. In addition to saving you money, many travel credit cards can help you avoid foreign transaction fees.
You Want a Better APR
If possible, you should try to pay your credit card bill off in full each month. Carrying a credit card balance can be costly and impact your credit score. While it is better to pay your credit card off, sometimes you are not able to.
Whether you occasionally carry a balance on your credit card or you’re in credit card debt, a credit card that has a high APR could cost you a ton of extra money.
Finding a credit card with a lower APR could be the right move for you. A lower APR will allow you to save money over time. Also, many new credit cards offer a period of time without interest.
Another situation where you may need a lower APR is if you are considering purchasing something large on a credit card and plan to pay it off over time.
You Want to Transfer a Balance
Another sign that it is time to get a new credit card is if you want to transfer a balance. As mentioned above, if you have debt on a credit card or loan with a high-interest rate, you will pay extra money to get rid of that debt.
Signing up for a new credit card that will allow a balance transfer could help you pay off old debt under better credit card conditions.
Because many credit cards offer a period of time with no payments, you could work on paying down your debt during that time. This would allow you to apply more money to the principle of your debt instead of the interest.
You Are Paying Annual Fees but Not Using the Benefits
Credit cards with rewards can be a great thing but not if you are paying an annual fee and not even using the rewards. If that sounds like you, it could be time to get a new credit card.
Annual fees can be costly and they are not worth paying for if you aren’t using the benefits. You would be better off having a credit card fee with fewer benefits but without an annual fee.
If you do decide to cancel your credit card with annual fees in favor of getting a new one, keep in mind that canceling your credit card could have negative effects on your credit score.
To avoid impacting your credit score, try calling the credit card company and ask if they would be willing to downgrade your card to one without an annual fee.
Is It Time for You To Get a New Credit Card?
Credit cards have several different benefits such as rewards, increasing your credit score, and giving you more buying power.
While the five signs on the list can help you decide if it’s the right time to get a new credit card, ultimately, the decision is a choice that you will have to make for yourself.
If you are looking for a credit card to help you repair your credit, contact us today to get started with our credit repair services!