3 Times It Pays to Get a New Credit Card

Here's when it makes sense to apply for a new credit card -- even if you already have quite a few.

Having too many credit cards can be dangerous. For one thing, it can open the door to extra spending, thereby landing you in debt. For another, having too many credit cards could cause your credit score to drop.

But sometimes, it pays to get yourself a new credit card, even if you already have a number of cards open. Here are a few scenarios when you may want to go ahead and apply.

1. There's a sign-up bonus you know you can snag

Many credit cards offer sign-up bonuses that give you extra cash back or points for spending a certain amount of money shortly after you open your card. For example, a card may have a bonus of $150 cash back for spending $1,000 within three months of opening your account. If there's a sign-up bonus you know you can snag easily, going after it could put extra cash in your pocket.

Say you're renovating your bathroom and you know, based on your research, you'll spend $1,000 at the hardware store in the next month. If you see an offer like the one just described, you should have no problem getting that $150 -- so you might as well scoop up that cash.

2. You need a higher spending limit

If you need more spending flexibility than what your current credit cards allow, contact your card issuers and ask for a spending limit increase. But if that doesn't work out, opening a new credit card could be a good solution. Even if your new card doesn't have the most generous spending limit, you still end up with a higher total limit across all your cards.

3. You're not happy with your current rewards programs

Many credit cards offer generous rewards programs, but you may find that certain ones don't end up aligning with your spending habits. For example, you may have a card in your collection that offers generous cash back on gas fill-ups, but if your driving habits have changed and you rarely hit the pump, that's not super useful to you anymore.

If you're not taking advantage of your credit cards' rewards programs or you think they're too stingy, then getting a new card could make sense -- especially if its rewards program is generous and works well for your habits.

Should you close out a credit card when you open a new one?

Having too many credit cards can be a bad thing. So should you rush to close one of your current cards when you add a new one to the mix? Not necessarily.

If you have a credit card that's been open for a long time, it pays to keep it -- long-standing accounts can improve your credit score or keep it strong. On the other hand, if you have a card with an annual fee and you no longer need it, that could be a card worth canceling.

While it's wise to not open too many credit cards, in some cases, adding a new one can be a smart move. It's also worth noting that new credit accounts make up 10% of your credit score, so it's also helpful to space out your applications instead of submitting several at once. That way, you can protect your score while enjoying the benefits of having another credit card at your disposal.