Signs That It’s Time To Look For A New Credit Card

You’ve been loyal to your plastic friend for close to a decade now, but are increasingly beginning to feel that it’s not giving you as much in return. Here are clear signs that you need to switch to a different Credit Card.

You’ve been dependent on your Credit Card for close to a decade now and have gone the distance in making payments on time, and monitoring your statements to keep them free from errors and suspicious charges. But, as time passes and your needs evolve, you realise that your Credit Card isn’t doing as much in return.

Here are clear signs that your wallet may be in need of a new piece of plastic:

1. Your Needs Have Evolved:

A decade ago, when you had just started working, your expenses may have been limited to weekend dining and movies, occasional travel and shopping. A decade later, with a wife and family to take care of, your expenses might have shot up to include bigger ones like buying appliances for the house, monthly groceries, childcare, summer vacation trips etc.

As you’ve grown older, your spending pattern has also undergone a gargantuan change. If your old card gives you air miles and other travel privileges which you have little use for, for now, it might be a good idea to switch to another Credit Card. Review your spend pattern to understand where most of your money is going every month, and pick a card that matches your spending preferences.

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2. Your Credit Score Has Improved:

If you got your existing Credit Card when you were just starting out in your career, chances are that your Credit Score may not have been very impressive then. When you have bad credit, your Credit Card options are limited. Over the years, if you’ve been making your payments on time, and paying your balances in full, it’s certainly possible that your Credit Score has moved into the “excellent” zone. This makes you a credit-worthy customer to banks, thereby making you eligible for premium cards.

Psst…not sure what your Credit Score is? You can find out in just a few minutes.

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3. You’re Getting Better Credit Card Offers:

A real improvement in your Credit Score means that you will now be eligible for premium Credit Card offers. If you’re already getting compelling offers from banks for Credit Cards, this means that banks have already pre-screened your credit information and think you’re a good fit for a particular card.

But just because the bank is offering you a certain card, it doesn’t mean you have to sign up for it. Shop around, compare offers that you’ve received, and apply for the one you think would be the best fit for you.

Not sure what Credit Cards you’re eligible for? Check your eligibility now.

4. You’re Not Earning Rewards From Where You Spend Most Money:

When you’re spending a considerable amount every month on groceries or paying utility bills, it makes more sense to opt for a Credit Card that offers great cashback on these spends rather than being stuck with a card that offers travelling privileges that you won’t have any use for. In order to decide which Credit Card would be an appropriate fit for you, review your monthly spend pattern and take a call based on where your money is being spent the most.

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5. You Haven’t Received A Credit Limit Increase In Years:

If your Credit Score and income has increased over the years but you see no improvement in your credit limit over the years, this is a clear sign that you should switch to a new Credit Card. But, before signing up for a new Credit Card, check with your old Credit Card issuer if they can raise the credit limit on your existing card.

If your bank refuses to approve a credit limit increase on your card despite being a responsible cardholder for several years, you should get yourself a new card.

6. Your Interest Rate Is High:

If your bank is charging high interest on your existing Credit Card, get in touch with your bank and negotiate for a lower rate. If your card issuer doesn’t agree, you can transfer your balance to a new Credit Card with a 0% introductory rate and pay off the balance without having to pay a dime as interest. There is a host of Credit Cards that come with balance transfer facility. You can check them out here.

7. You Want To Take Advantage Of Sign-Up Bonuses:

Credit Cards offer a host of attractive sign-up bonuses for cardholders if you spend a certain amount within a specific time-frame, usually in the first few months. You have to be a new account holder to be able to qualify for the bonus. If you’re not satisfied with your existing Credit Card, it’s a good opportunity to sign up for a card that offers great sign-up bonuses.

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8. You’re Paying An Annual Fee But Not Getting Additional Benefits:

You should consider paying an annual fee on only three occasions: when you’re rebuilding your credit or the only card you qualify for has an annual fee or your Credit Card perks far outweigh the annual fee. If any of these reasons don’t account for why you’re paying an annual fee, ditch your annual-fee Credit Card for a lifetime-free one.

You can opt for a new Credit Card without closing your old Credit Card because the age of the account benefits your Credit Score. Even when you switch to a new Credit Card, keep the old one active so that it’s included in your Credit Score. If you’re paying a high annual fee on this card that you no longer want to pay, go ahead and close this card. You must pay off the outstanding balance if there’s any to avoid spiking your credit utilisation before you close the card.

Opening a new Credit Card also increases your debt, so make sure that you don’t overspend, now that you have more than one Credit Card open. Continue to use your Credit Card only for expenses that you can pay off in full each month even if you divide that amount between your two Credit Cards.

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