3 Signs It’s Time to Look for a New Credit Card

Jan 4, 2017

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You do a lot for your credit card. You pay the bill on time. You monitor its activity for any suspicious charges. Maybe you’ve even studied the terms to uncover some awesome hidden perks. But have you asked yourself an important question: What’s your credit card doing for you? If you’re struggling to find an answer worth celebrating, it may be time to think about adding a new piece of plastic to your wallet. Here’s a look at three common reasons you should consider applying for a new credit card.

1. Your purchasing behavior has changed.

A recent J.D. Power US Credit Card Satisfaction Study revealed that more than 20 percent of cardholders are using cards with fees or benefits that aren’t in line with their individual spending habits. Do you fall into that 20 percent? Think about how your spending patterns have evolved over the past few years. Did you used to travel for work on a regular basis but now have a job that keeps you closer to home? While a hotel-branded credit card was your best friend for racking up extra night credits, the card might not be doing much for you now that you’re enjoying the ease of a walk to work.

You may be better off considering a card designed to reward everyday purchases like Chase Freedom or the Discover it® Card. Both offer 1% cash back on every purchase with an additional 5% back in certain spending categories that change each quarter. Plus, with the Chase Freedom, if you hold an Ultimate Rewards-earning card like the Chase Sapphire Reserve Card or the Chase Sapphire Preferred Card, you can redeem your cash back as points and get even more value out of your rewards. Take a complete inventory of where most of your dollars are going each month, and find a card that matches your personal spending preferences.

2. You’re about to buy something big.

If your short-term future includes some sizable expenses, a new card can be the ticket to getting extra credit. Banks and card issuers are aiming to attract your attention with sign-up bonus offers that will reward your first few months of spending. For example, are you planning to take a big vacation at the beginning of the new year? If you’ll be charging airfare, hotel and meals to your card, consider one of the top travel credit cards to reap the rewards of tens of thousands of bonus points for those expenses. With the Platinum Card from American Express, you’ll see a bump of 40,000 points if you spend $3,000 in the first three months after opening the card.

Additionally, if you’re making a big purchase, it could be worth using a card that offers some type of protection. The Amex Platinum is a good choice in this respect as well, since it overs coverage for 90 days after your date of purchase with limits of $10,000 per item and $50,000 per year.

3. Your credit score has improved.

Check your credit score to see if you qualify for the best cards on the market.
Check your credit score to see if you qualify for the best cards on the market. Image courtesy of Shutterstock.

Chances are your credit has changed since you opened your first card out of college. And if you’ve been making on-time payments and paying your balance in full, your credit score has likely soared into “excellent” territory. That puts you in an important category: Banks love you and want your business. A recent bump could make you eligible for top premium cards, such as the Chase Sapphire Reserve, which is still offering a 100,000-point bonus for a few more days.

When is the last time you checked your credit score? Discover will give you your FICO score for free — even if you aren’t a customer. Generally, if it’s above 750, you can pretty much take your pick of any credit card on the market. Of course, you’ll want to take issuers’ application restrictions into account, since these can limit the number of cards you can open in a certain amount of time.

Bottom Line

Opening a new credit card doesn’t mean you need to close any of your other credit cards. In fact, you’ll most likely want to keep those accounts open to preserve your long lines of credit. Check out “How Closing a Credit Card Impacts Your FICO Score” to learn more.

 

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