4 Smart Reasons to Open a New Credit Card

People often stick with the same credit cards, year after year. If you already have one, or more, you might not feel like going through the application process for another one. But it doesn't take that long, and it could be worth your time.

There are several ways you can benefit by opening a new credit card. Here are a few of the most common reasons it's time to start looking at card options.

1. You've improved your credit score

Your credit score is one of the biggest factors affecting which credit cards you can get. As your credit score goes up, you'll be able to qualify for more cards. You won't just have more options, either -- you'll have better options. Credit cards with higher credit score requirements also have more valuable benefits.

If you've been able to increase your credit score, make the most of it. Look for a credit card with a higher cash back rate, or a better introductory offer. Benefits like these can be worth hundreds of dollars every year.

Let's say you go from a cash back card that earns 1% back on purchases to a 2% card. If you spend $30,000 on your credit card every year, that will take you from $300 to $600 in annual cash back.

2. You have big expenses coming up

When you have costly purchases to make, it could be a great time to open a new credit card. Many credit cards have sign-up bonuses that reward you for meeting a spend requirement.

For example, some cards offer $200 if you spend $500 in the first three months. If you're going to spend that money anyway, why not turn it into $200 cash back? There are also much larger sign-up bonuses available, including some for over $500 cash back or more. Larger bonuses also normally have larger spend requirements.

It's not a good idea to spend more just so you can earn a sign-up bonus. But if you know you'll be spending more on a new computer, home maintenance, or any other major expense, consider opening a new credit card to get a bonus out of it.

3. You're paying off credit card debt with a high interest rate

When you have credit card debt, the conventional wisdom is not to open any more credit cards. That's usually correct. You don't want to make the situation worse. But there's a way opening a new card could be beneficial.

Balance transfer credit cards are specifically designed for paying off debt. They have a 0% intro APR on balance transfers. So, you can transfer over balances from your other cards, and then pay them down without any interest charges. Once the intro period ends, the APR goes up.

That 0% intro APR can last 18 months or longer, depending on the card. Considering the average credit card APR is 21.47%, this can save you quite a bit. At that rate, $5,000 in credit card debt could cost you over $1,000 a year in interest. At a 0% APR, it costs you nothing.

4. You're not happy with your current card's features

There are lots of credit cards and credit card companies. With so many options, there's no reason to stick it out with a card you don't like.

If you're unhappy with your current credit card, think about what features you'd prefer. Maybe you're tired of paying an annual fee. In that case, you could close or downgrade your current card, and start looking at no annual fee cards. Or if your spending habits have changed, you might want to look for a rewards credit card with new bonus categories.

A credit card application is a quick process. You can do it within about 10 to 15 minutes online, and many cards also offer instant approvals. If any of the reasons above apply to you, getting a new card could pay off.