1. Your Credit Scores Have Improved
When you have bad credit, your credit card options are limited. You may have to open a secured credit card or accept an unattractive credit card until you can rebuild your credit and qualify for something better. As your credit improves, you should look for a new credit card with better terms than what you started with – no annual fees, a low-interest rate, and possibly even rewards.
2. You’re Receiving Offers for Better Credit Cards
If credit card companies are sending you offers for credit cards with better terms than the ones you currently use, consider accepting one of those offers. Credit card companies pre-screen you based on your credit information, so they think you may be a good fit. First, compare what you’ve received in the mail to credit card offers online. Then, contact the credit card company or apply online once you’ve made a final decision. Not receiving any credit card offers? Make sure you haven’t opted out of receiving them.
3. Your Interest Rate is High
Before switching to a new credit card, try to negotiate a lower interest rate with your credit card company. Be prepared to transfer your balance to a new credit card if your credit card company does not cooperate with you. You can transfer your balance to a credit card with a 0% introductory interest rate and pay down the balance without incurring any further interest. Or you can at least pay down a significant portion of the balance without interest. Check online for great balance transfer offers. As of April 2022, Citi Simplicity offers a 0% introductory interest rate for 21 months on balance transfers.
4. You’re Not Earning Any Rewards
These days, there’s hardly any reason not to have a credit card that offers rewards when many credit cards come with great rewards programs – even Discover offers a secured credit card with rewards. If you regularly use your credit card and pay off your balance in full, a rewards credit card is a better option than your current credit card that provides no additional benefits for using their credit card.
5. You’re Not Earning Rewards in the Categories Where You Spend the Most
If you spend a lot on fuel and groceries – $500 or more a month – consider the American Express Blue Cash Preferred card, which earns 6% cash back on eligible purchases in those categories. Frequent travelers might benefit from the Chase Sapphire Preferred card, which earns two points for every dollar spent on travel and dining.
6. You Haven’t Received a Credit Limit Increase in Years
If your credit limit has remained stagnant while your income and credit scores have increased, it’s time to look for a new credit card. Some credit cards have a maximum credit limit that applies to all cardholders regardless of income and other factors. Consider another credit card if you can’t get a credit limit increase despite being a responsible cardholder for several years.
7. You’re Paying an Annual Fee but Aren’t Getting Any Extra Benefits
There are two general situations where you should pay an annual fee for a credit card: rebuilding your credit, where the only cards you qualify for require an annual fee, or when the benefits of your credit card far exceed the annual fee. Otherwise, get rid of the credit card with the annual fee in favor of a no-cost card.
8.You want to take advantage of registration offers
Many credit cards offer rewards for cardholders who spend a certain amount of money within a specified time frame, usually three months. The requirement is that you must be a holder of a new account to qualify for the reward. Does it really make sense to continue using your current credit card that won’t give you this type of reward when you could switch to another credit card and benefit from it?
9. You do not have your own credit card
If your only credit card is one where you are an authorized user or a joint account holder, it’s time to apply for your own credit card. As long as you have a credit card with someone else, your credit history depends on how they use the card. Once you are able to qualify for a credit card on your own, look for a new credit card for yourself, even if it’s with the same issuing company.
10. Your current credit card will disappear
Sometimes, credit card companies decide not to continue a certain credit card. For example, your Costco American Express card may stop working because Costco has decided to use a Citi Visa card as its store credit card. Your credit card company may give you the option to switch to another credit card within its portfolio, but if you prefer, you can look for a better credit card elsewhere.
Should you close your old credit card?
Generally, it’s best to keep your old credit card open because the age of the account benefits your credit score. So, even if you switch to a new credit card, use the old one periodically to keep it active and include it in your credit score. On the other hand, you may want to close your old credit card if it charges an annual fee that you no longer want to pay. Make sure to pay off any remaining balance before closing the credit card to avoid increasing your credit utilization.
Be cautious of debt
Opening a new credit card also opens up additional borrowing capacity. Be careful not to spend more than you can afford now that you have more than one credit card. Continue to purchase what you can pay off in full each month, even if you split that amount between your two credit cards.
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Sources:
– The Balance
– Citigroup Inc. “Citi Simplicity Card.”
Source: https://www.thebalancemoney.com/is-it-time-to-look-for-a-new-credit-card-3882366
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