When people are used to their credit cards, they tend to be reluctant to switch. It is often because they assume that there isn’t anything much better out there or they’re afraid to lose their rewards. Others might think that they won’t qualify for a better card. While all of this may be true in some cases, there’s a strong chance that you could get a much better deal if you shop around. And, if you’ve been using your credit cards responsibly over the years, you might be a much more attractive candidate to issuers than you think. Let’s take a look at a few signs that it may be time for you to switch to a new credit card.
Your Situation Has Improved
If you got your current credit card when you were still building your credit or at a time when your credit was bad and your situation has gotten better over the years, we suggest you check your credit score. You may not know this, but people with good credit are not only more likely to get accepted but will often get much better APRs than people with regular or bad credit. So, check your credit score and take a long hard look at the APR on your cards to see if it’s reasonable.
If you want to know what is a good APR, Tally has an informative article on this. They explain exactly what a good APR looks like and what factors credit companies use to set their interest rates. They share some inside information on the influence of banks on APRs, and what the average APR is among all credit cards so you can get a better idea of where yours stands.
Another thing we suggest you do is to speak with your current issuer and see if you can negotiate a better APR. Knowing what the average APR is and what a good APR looks like will give you some leverage and an idea of what you can realistically get and ask for. If they refuse to meet you halfway, then you could move your balance to a card with a 0% introductory rate on balance transfers and a lengthy 0% APR period.
It Could Increase Your Credit Score
Another benefit of switching is that you could get access to cards with higher limits which could help boost your credit score believe it or not. This is because your credit utilization ratio, which is the amount of available credit you have versus what you’re actually using, has a huge influence on your credit score. Getting a card with a higher limit will push that ratio further down and result in a better credit score.You have to be careful to not apply for too many cards at once, however. Also, only apply if you’re 100% certain you’re going to be approved. This is because credit applications will trigger hard inquiries on your credit report and will affect your credit score negatively.
You’re Not Getting Enough Rewards
You should also consider switching if the credit card you’re currently using doesn’t offer competitive rewards, or if you’re getting lots of rewards in categories that are irrelevant to you. If you don’t have a car or don’t spend money on entertainment, then there’s no point in you having a card that offers cashback on gas or free movie tickets.
Look at the areas where you spend the most and look for a credit card that will give you the most benefits. If you have a large family and you spend a lot of money on food, look for a credit card that offers cashback on groceries. If you travel a lot in different countries, look for a card that has a great air miles program, but also offers deals on lodging and additional peaks like concierge and discounts at certain restaurants. Some cards will reward you for shopping at specific places, like Amazon, for instance. So, if you spend a lot of money there, this could be an opportunity to make some savings.
You Keep Getting Offers in the Mail
You may have heard that getting offers for new credit cards by the mail is a sign that credit card companies see you as a favorable customer. If you thought that was a myth, it isn’t.If you’re constantly getting offers that are better than what you’re getting right now, this is usually a sign that you have passed the card issuer’s pre-screening and they view you as a potentially good customer. This is why you should at least look at the package they’re offering and compare it with the kind of offers you see online. If you feel like their deal is worth it, you can contact them so you can complete your application or apply online.
You Can’t Get a Higher Limit on Your Current Card
If your credit score and income have improved but your card issuer has never extended an offer to increase your credit limit, this might be because you can’t do it on that card. Some cards will have limits that apply to everyone no matter their financial or credit situation. Again, being able to increase your credit limit is incredibly important not only so you can have more leeway, but also to improve your credit, so look at whether there is a hard limit on the card and consider your options if there is one.
You’re Not Getting Anything in Return for Annual Fees
Some people think that annual fees on credit cards are a given, but that’s not the case. There are really few situations where it would make sense for someone to take out a card with an annual fee in our opinion. If this is the only card you can qualify for, then it’s understandable. Paying an annual fee is also fine if you’re getting significant perks out of it. If you’re not and you can get something without an annual fee, then start looking as there are tons of cards out there that don’t have any.
If you’ve been using the same credit card(s) for years, know that there could be much better deals out there for you. If you feel like you have the score to qualify, look at all the options available and see if you could find something more favorable to you.