3 Signs It’s Time for You to Open a New Credit Card

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Do you need a new credit card account? Keep reading for a few situations that indicate a new card might be right for you. [[{“value”:”

Credit cards come with some amazing benefits and perks if you use them right. Depending on your card, you could earn a substantial amount of rewards and enjoy valuable cardholder benefits like airline lounge access or extended warranties. But not every card is the right one for every person.

Should you find a new one that’s a better fit? Watch out for these three signs that suggest getting a new credit card could help to improve your financial life.

1. You aren’t earning very many rewards with your current card

Earning rewards is one of the best reasons to have a credit card. So if your card doesn’t have a rewards program but you can qualify for a card that does, consider applying for a new card.

Likewise, if your rewards program is a poor fit, then getting a different card makes a lot of sense. Say, for example, you used to travel often and had a great travel rewards card offering five times the miles on travel purchases. But now you have kids and you travel only as far as your local Costco. In that case, you might be better off picking a card offering you extra cash back on groceries instead.

Take a look at your card statements over the past few months to see where you spent the most, then look for a rewards card with bonus rewards in that particular spending category. If you can find a card that will give you more points or cash back for your target spending areas, it’s probably time for a switch.

2. You’re paying a high APR on your existing credit card

If you don’t carry a balance, it doesn’t matter what your credit card’s APR is. But if you do, then it matters a whole lot. The average credit card interest rate is 21.47%. That’s a very high rate. If you’re carrying a balance, you’re making purchases a lot more expensive.

It may be beneficial to apply for a balance transfer credit card in this situation. These offer a special promotional rate, such as 0%, for transferred balances — although you do pay an upfront fee of around 3% to 5% to move the money over. Still, if you have a plan to pay down the debt by the end of the 0% period, it could absolutely be worth applying for the balance transfer card to make paying off your existing cards easier.

If you aren’t carrying a big balance now but periodically do and you end up owing interest for a few billing cycles a year, looking for a card with a lower APR could help you save. Compare the rates on new cards versus your existing ones to see if there’s a better deal out there. If there is, jump on it so you can send your creditors less (or, if possible, make a plan to stop carrying a balance, so you can enrich yourself instead of credit card companies).

3. You’ve improved your credit a lot

Finally, if you’ve improved your credit profile since you applied for a card, you may want to look into what else is out there. You may now qualify for better rewards cards or cards with better perks.

This is especially true if you originally got a secured credit card that required you to make a deposit. You may be able to graduate to an unsecured card and get your security deposit back. An unsecured card is likely to have more to offer besides just easy qualification and credit building.

If you spot any of these signs, start looking for your perfect new card today. You’ll likely end up very glad you made the switch.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and Target. The Motley Fool has a disclosure policy.

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