4 Times When You Should Change Your Credit Card

If your credit cards are chipped, peeling, and collecting dust, then it’s probably safe to say it’s time for an upgrade. But how else can you tell when it’s time to shop around for a new credit card? There’s a good chance than an older card is no longer the best match for you.

If you’re unsure whether it’s time to find a new card, here are the two main questions you should ask yourself — and how to find the best new card for your lifestyle.

Can you afford the annual fee?

If you realise you can no longer afford the annual fee, then your path forward is clear: Replace the card or ask to downgrade to a no-fee version.

Now, if you can afford the card’s annual fee, you’ll need to take a look at some other factors to determine if the card is adding value to your life. Perhaps a credit card made sense for your lifestyle when you opened it, but now years have passed and the perks that make the most sense for you have changed. In order to evaluate whether or not your card is still a perfect fit, here are some signs that it’s time for a credit card replacement.

The interest rate is too high

Although many of us are not vigilant about our credit card’s interest rate, those numbers staying at record highs these days. Ideally, you’re not being charged interest, because ideally, you’re not carrying a balance from month to month. But if you’re in the middle of paying off credit card debt, your card’s interest rate has a huge impact. Look for a card with as low an interest rate as possible. The easiest way to lower your credit card’s interest rate? Just ask.

You’re not earning (or using) the rewards

If you use your card regularly and always pay your balance in full, there’s no reason you shouldn’t have a rewards card. There’s no shortage of rewards programs out there, even if you’re hesitant — Discover, for instance, offers a secured credit card that still offers rewards.

If you’re earning rewards, take a look at where you’re doing most of your spending and find a credit card that aligns with your habits. Someone who spends a lot on gas and groceries should look for a cash preferred card, while frequent flyers need to get their hands on a travel-specific rewards card.

Here’s our guide to maximizing your cash back rewards bonus categories.

The annual fee increased

This one brings us back to our initial question: Can you afford the annual fee — and is that fee worth it? Reasons to pay an annual fee are if you only qualify for cards that require one, or if your rewards (see above) make the annual fee well worth the cost. If neither of those things are true for you, opt to replace your current card with one that doesn’t have an annual fee.