Published in: Credit Cards | Feb. 27, 2019
3 Signs You Are Ready for a New Credit Card
By: Christy Bieber
Is it time to switch to a different credit card? These three signs suggest you need to explore some new options.
Choosing a credit card may not seem like a big deal. But, in reality, your choice of card could have a pretty substantial impact on your finances. Using the right card could mean paying much less in interest or earning generous rewards -- while the wrong card could cost you a lot of money.
Not sure if your card is the right one? Check out these three big signs that suggest you're ready for a new card.
1. Your card is charging you a fortune in interest
The biggest indicator that you need to switch credit cards is when you're paying high interest on your debt. This only matters if you carry a balance, of course. But, if you do, there's no excuse to keep a card that's causing you to pay more in interest than necessary.
Credit card interest is costlier than any rewards your card could provide you. And, high interest makes it difficult to pay down your balance, so it takes you longer to become debt free.
There are 0% balance transfer cards you can use to reduce the interest you pay on existing debt and 0% APR cards that charge you no interest on purchases for months after getting the card. If you have a current balance or you regularly carry a balance, it's time to find one of these cards to use.
2. Your credit card comes with big fees
Are you paying an annual fee for your credit card? If so, you need to make sure it's worth it. The added rewards the card provides compared with a no fee card, coupled with any card-specific perks, need to exceed what you're paying in fees.
Compare credit card rewards programs to find out if your card is performing well enough to justify paying an annual cost -- and you may find a better card that won't charge you anything just for being a customer.
You should also watch for other fees your card may charge. If you travel often but are forced to pay a foreign transaction fee on your credit card, check for an alternative that won't charge you every time you use your card while abroad.
3. You aren't using your credit card rewards program effectively
If you're smart about what credit card you use, you can earn hundreds or even thousands of dollars every year in rewards. But, to do this, you need a card with a reward program that works for you.
Your card's rewards program should match up with the spending you do most often. This means you shouldn't have a card offering bonus points for travel purchases if you're a homebody. To find out what you usually spend your money on, check back over a few months of credit card transactions to spot trends. Then pick a card that gives you added cash back or points for your most frequent purchases. If you dine out a lot, look for a card that boosts your rewards for restaurant spending.
You should also make sure your card's rewards program is easy to understand and that you're actually redeeming the rewards. If you've earned tons of points for gift cards but aren't ever cashing them in, switch to a card with rewards that are easier to use or that you're more excited about using.
Find the perfect card for your needs
Are you now convinced you're using the wrong card for your situation? If so, it's time to pick out a new card that will cost you less or better match your lifestyle. Check out our picks for the best credit cards to find the card that's right for you.
Our #1 cash back pick has a surprise bonus
This may be the perfect cash back card! That's because it packs in $1,148 of value. Cardholders can earn up to 5% cash back, double rewards in the first year, and avoid interest well into 2020. With such a deep bench of perks you'll wonder how this card packs in a $0 annual fee. Best yet, you can apply and get a decision in two minutes. Learn more with our in-depth review.