Thursday, Nov. 14, 2019 | 2 a.m.
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Having a great credit card can be a huge asset but using one that's subpar can be a significant burden. So how do you know if your card is working for you? "When choosing a card, consider your priorities. Are you interested in earning cash back or travel points? Is a card with lower rates and fees beneficial? All of these questions will inform your decision," said Nicole Cypers, Vice President of Public Relations at America First Credit Union. If you're debating about opening a new account or ditching your existing card, use these questions to help guide your search.
3 Reasons to consider a new card
"Many people stick with the cards they have had for a while and are comfortable with, even if there's a better one out there," Cypers said. Every now and again, it's a good idea to research new cards to see if something more compatible is available.
1. If your credit has improved since your last card
If your credit has improved since you opened a card, you may qualify for one with better terms and rates. Receiving emails and mailings about better cards is another indicator that you should explore your options—those offers are generally pre-screened and card companies send them based on your credit score and financial information.
2. You're not benefiting from the rewards program
If you're not getting the rewards you deserve, a new card may be in order. There are many programs, and you should capitalize on offerings that appeal to you. "Rewards are such an important part of the credit card choice. At America First, we offer Visa Signature cards that allow members to customize the rewards they earn, ensuring their cards make sense for their unique situations. Everyone should be maximizing their rewards points," Cypers said.
3. Your interest rate is high or you're paying an annual fee without any benefit
If you're looking for lower rates, shop around for balance-transfer options. You should be able to move your balance to a credit card with a lower rate, saving on the interest," Cypers added. Alternately, if your card carries an annual fee, you should be making up those costs throughout the year. The card's benefits should outweigh the fee—if not, it's time to find a new one.
Choosing a new card
First, zero in on your goals. Ask yourself why you need a different card, what you hope to gain from it and how you'll use it. For example, some people get credit cards exclusively for emergencies. In that case, a card with low rates and no annual fee is ideal. However, for those who use a card for everything they purchase, it might make more sense to pay an annual fee if it has the right rewards. "It's simply a matter of evaluating what makes sense for you. Everyone's circumstance is different," Cypers said.
Secured cards
If you're new to credit or you're in the process of rebuilding your credit, a secured card may be a good option. "A secured card offers a low rate with the purchasing ability you need, while helping you rebuild credit. This option ties your spending limit to the funds in your savings account," Cypers said.
Applying for a card
Be realistic when applying for a new card. Be familiar with your credit report and research the cards you're considering. Only apply for cards that you're likely to qualify for so that the hard credit inquiry is worthwhile. Too many of these inquiries in a short time period can lower your score.
