HomeFinance6 Signs it’s Time to Apply for a New Credit Card

6 Signs it’s Time to Apply for a New Credit Card

Bank cards can supply a wealth of advantages. Money again. Journey rewards. They could even embody hidden perks like cell phone insurance coverage and wine tastings.

Which implies when you’re not taking advantage of the earnings out there by your bank card, it might be time to attempt one thing new.

It’s a good suggestion to evaluate your bank card utilization each every so often to make sure your spending is being rewarded. Maybe your procuring habits have modified and the rewards your card gives not profit you. Or perhaps the annual charge outweighs any perks you’d obtain.

Use the guidelines beneath to find out whether or not or not it’s time so that you can think about making use of for a brand new bank card.

1. Your APR is Too Excessive

In an ideal world, bank card debt wouldn’t exist. Sadly, nobody is ideal and most of us will carry a steadiness on our card and pay curiosity every so often (though we strongly encourage you to repay your bank card invoice in full every month).

In situations if you merely can’t pay your steadiness in full, take note of your APR. Is your price notably excessive? How a lot curiosity are you accruing every month? Relying in your card’s APR, it might be time to think about another. See our picks for the greatest low-interest bank cards for some choices.

You could possibly additionally think about a bank card steadiness switch that will help you pay down your debt. That is if you transfer your steadiness from one card onto a brand new card with a decrease price (some playing cards supply an introductory 0% rate of interest). Take a look at our votes for greatest steadiness switch bank cards to see if any would give you the results you want.

Learn extra: How do bank card steadiness transfers work?

2. You’re Not Incomes Rewards

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There are a rare variety of bank cards that present 1% money again in your spending. Some even supply 5 instances the earnings in particular classes, such because the Chase Freedom Flex℠ or the Uncover it® Money Again bank card.

In case your present bank card doesn’t supply factors or money again, it’s time to use for one thing totally different. Spend a while evaluating your spending to find out which bank cards would possibly reward your present habits.

Learn extra: Finest money again bank cards

3. Your Spending Habits have Modified

Even when your present bank card has a pretty rewards program, maybe it not advantages your distinctive spending tendencies.

Possibly you began with a scholar bank card in school to construct your credit score historical past. Or maybe your bank card rewards you for travel-related purchases with perks resembling airline tickets or resort stays, however you don’t journey usually anymore.

In case your bank card isn’t an ideal match to your present spending patterns, now could be the time to analysis another choices and apply for an additional bank card.

Learn extra: Finest Journey Rewards Credit score Playing cards

4. Your Annual Price Cancels Out Your Advantages

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Not each bank card requires an annual charge, so in case your present card does, it’s worthwhile to calculate your earnings annually and decide whether or not or not your annual charge outweighs your advantages.

For instance, the American Specific® Gold Card comes with a number of engaging rewards, together with 4x factors at eating places worldwide and U.S. supermarkets, in addition to 3x factors on flights. Nevertheless, the cardboard additionally comes with a hefty annual charge of $250. Factors rewards are nice, however think about the fee you’re paying upfront to earn it.

Learn extra: Is an Annual Price Credit score Card Ever Value it?

5. You’re Not Claiming Your Rewards

Some bank cards supply wonderful rewards, however the steps cardholders should take to redeem these perks are so advanced that you simply by no means make the most of them.

For instance, the Citi Premier® Card has a aggressive sign-up bonus of 60,000 factors if you spend $4,000 within the first three months of account opening, and you’ll earn 3% again on purchases at supermarkets, gasoline stations, eating places, and extra. However, right here’s the catch: when you’re not touring a lot and don’t plan to make use of your factors for flights or motels, then you definately seemingly received’t get outsized worth out of your factors and must redeem for money again, merchandise or redeem (at a primary one cent per level) in the direction of any journey buy by thankyou.com.

Should you’re not taking advantage of the rewards provided by your present bank card, perhaps it’s time to change issues up and apply for one thing new.

Learn extra: Finest rewards bank cards – get extra bang to your buck

6. When There’s a Particular Signal-Up Bonus

Supply: Giphy.com

Many bank cards supply some kind of intro bonus, usually value a whole lot of {dollars}, to incentivize new prospects to use. Whereas this alone is probably not sufficient to warrant making use of for a brand new card, it may very well be a smart choice if in case you have a big upcoming expense.

To obtain a bank card sign-up bonus, new cardholders usually should meet a selected spending objective inside the first few months of their account opening. Should you’re already anticipating a big buy within the close to future, think about making it on a brand new card, so you’ll be able to earn some a reimbursement.

Take a look at our often up to date record of the perfect bank card sign-up bonuses to see what fits your wants.

When You Shouldn’t Apply for a New Credit score Card

1. When You’re Additionally Making use of for a Massive Mortgage

Each time you submit an utility for a brand new bank card, your credit score rating dips just a little. Because of this, when you plan on in search of financing within the close to future, keep away from making use of for a brand new card simply but, because it might have an effect on the rate of interest your lender gives.

Moreover, attempt to not apply for a bank card after in search of a big mortgage, since lenders could interpret your consecutive purposes for more cash as a crimson flag.

Learn extra: What Credit score Rating do You Have to Get Accepted for a Credit score Card?

2. After Dropping a Job

If you’re making use of for a brand new bank card, odds are you’ll be requested to supply info in your revenue degree.

Consequently, when you’ve just lately misplaced a job, it might stop your bank card utility from being permitted. As an alternative, focus your time and vitality on discovering a brand new job earlier than you hunt down a brand new bank card.

3. Earlier than Doing Your Analysis

Should you assume it’s time to use for a brand new bank card, there’s all kinds of fantastic selections out there. However, not each bank card will probably be well-suited to your spending habits, and making use of for a number of playing cards without delay can really harm your credit score rating.

Earlier than you resolve which card you’d like, be sure you analysis choices at size, so you’ll be able to select a brand new bank card properly.

The Backside Line

Even when your bank card matched your wants if you first received it, it is probably not the perfect match to your spending habits right now. Your card needs to be rewarding you to your purchases. You ought to be incomes perks and factors fairly than shedding cash every month on curiosity or yearly by a big annual charge.

Take a while to evaluate your spending habits and the advantages your bank card is (or isn’t) providing you. Should you uncover that your card isn’t rewarding your purchases, it’s seemingly time to use for another.

Featured picture: ELUTAS/Shutterstock.com

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