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Is it time for a new credit card?

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Credit cards are great for collecting rewards and points, but you want to make sure you have the right card for your spending style. There are many considerations when: choose a card, and depending on your stage of life, you may need to pick a new one. This article looks at several factors to consider when deciding whether to purchase a new credit card.


Due – Due

1. You have 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 target within the first 30-90 days of opening the card. The goal is to get you to put money on the card so that you can build up a balance. The interest rate is also lower than normal during these introductory periods.

2. You don’t earn rewards

Many older credit cards don’t actually offer rewards, so if you’re using a card that doesn’t have a reward system, it’s probably time to switch. You may not earn many rewards either. If so, consider transferring your card to a new card with better rewards. Evaluate the expenses and determine: if you want money backdining or mileage rewards.

3. Annual Fees Undercut Your Card Benefits

If your card has a high annual fee, or if the annual fee is eating up a large chunk of your rewards, it may be time to switch to a new credit card. Some cards, such as the American Express Gold Card, offer great rewards, but also come with a high annual cost. Carefully consider the benefits of a card and whether the annual fee will make it worth it.

4. Your current cards have a high APR

One problem with credit cards is that they can have a high APR. Currently, the average credit card rate at most since 1996. APR is the amount of interest you are charged each month. When you carry a balance, this is the amount that will be added to your card balance as interest. If you have a high APR, you will pay more interest each month. One way to avoid paying huge amounts in interest is to choose a credit card with a lower interest rate.

If you’re struggling with a high balance on a high APR card, you can also use a credit card balance transfer to help you pay things off. This way you can move your balance from one card to another (hopefully at a lower rate).

5. Your spending pattern has changed

A telltale sign that you should switch credit cards is if your spending habits have changed. As we age, change jobs, or undergo profound changes in our lives, our spending habits naturally change.

For example, you’ve used a travel card a lot before, but are now settled and taking advantage of more cash-back rewards. If you started a business or your business has grown, you may also need a new card. Remember your business must have a good reputation and in good standing and finances before applying for a new business card. In either case, your credit card must match your spending habits and you must find a card that suits you.

6. Your rewards are not used

Most credit cards offer rewards, but if you don’t use these rewards, you may want to switch cards. For example, a corporate credit card can come with unlimited 2x Miles with 75,000 Bonus Miles, but you must spend a certain amount to receive these bonus miles. If you don’t often buy air tickets, or don’t plan to put purchases on the cards, these kinds of rewards will go unused and you will ultimately not be able to take advantage of these benefits.

Times to avoid getting a new card

1. Without researching first

Don’t just apply for a new card as soon as you get the chance. It is important to do your research first. It is important to research all available options because: not every card is good for your spending habits. Plus, applying for multiple cards at once can hurt your credit score.

2. After you lose your job or your income drops

Do not apply for a new card if you have recently lost your job or if your business income has fallen significantly in recent months.

If you lose your job, you may need some quick cash to pay your bills, but applying for a credit card is still not a good idea. First, it can get difficult to pay your monthly credit card bills. Second, when applying for a new credit card, you must provide your income level. If you have no income, you will likely be denied, but you will still get a slap on your credit score for the hard examination of your credit report. In this case, it is better to take the time to find a new job before request a new card.

Likewise, if your received business income has declined, your business may end up struggling to pay off its credit card debt. Make sure you’re always there send invoices on time for each customer or customer to ensure that the status of all payments is tracked and the funds received. Once your business income is back to normal, you may want to consider applying for a new card.

3. When you apply for a new loan

One of the biggest mistakes you can make when applying for a new credit card is applying for one when you apply for a major loan. When you apply for a new credit, your credit score drops slightly. Your score can also be affected by: the number of new credit lines you open at the same time. This means that if you plan to apply for a mortgage or loan for a new car or housing project, you may get an offer with a much higher interest rate than you would otherwise.

Conversely, you should not apply for a credit card even after applying for a large loan. This can also be a warning to creditors that you are exceeding your credit.

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