Top 5 Reasons to Get a New Credit Card
Read more about Best Credit Cards
You’re scared of trying anything new. It’s in your nature. You figure any new deal — especially a credit card deal — must have a catch.
But here’s the thing: credit card companies do have promising — and real — deals to offer newcomers. It’s their way of winning you over. You still need to consider the full details (e.g.: what’s the APR after that intro period is over? Will you have to pay an annual fee?), but if you get up to speed on what’s available, you can benefit in the long run by signing up for a new credit card. We give you the five reasons why below.
The Top 5 Reasons to Get a New Credit Card
1. You want better rewards
If your current cards don’t offer many (or any) cash back rewards or deals on travel, hotels, and car rentals, you may be bypassing significant savings. The same holds true if you have a card with rewards that don't match your current spending patterns - e.g., the card offers 2% back only on purchases at hotels but you rarely travel. (As a general rule, rewards cards carry higher interest rates, so they aren’t ideal for people who carry balances. Rewards cards are a great option for people who plan to pay in full each month. If you plan to carry a balance, consider a low interest credit card instead.)
The Barclaycard Arrival Plus is the best travel rewards credit card from our partners. You earn 2x miles on ALL purchases with no mileage caps and no foreign transaction fees. Plus, you get 10% miles back when you redeem miles for travel statement credits - e.g., if you redeem 25,000 miles for travel, you get 2,500 miles back. You can use the miles for a statement credit toward any airline purchase to any destination with no seat restrictions and no blackout dates. There is an $89 annual fee (waived the first year).
In addition, if you make $3,000 or more in purchases in the first 90 days from opening an account, you'll earn 40,000 bonus miles (worth a $400 travel statement credit) with the Barclaycard Arrival Plus.
If you don't travel and don't want to pay an annual fee, then consider a cash back credit card. The Chase Freedom is the best cash back rewards credit card from our partners. It provides 5% cash back on up to $1,500 in combined purchases every quarter in rotating bonus categories that change every three months, and unlimited 1% cash back on all other purchases. You do have to activate the bonus categories each quarter, but it's free and easy to do. There is no annual fee and rewards never expire.
Plus, if you make $500 in purchases in your first 3 months from account opening, you'll earn a $100 bonus with the Chase Freedom. In addition, the card has a 0% intro APR for 15 months on purchases and balance transfers. After the intro period, a variable APR of 13.99%-22.99% depending on your creditworthiness.
2. You want to save money with an introductory 0% APR
These days, it’s possible to find a credit card offering a 0% introductory APR for 12 to 18 months on balance transfers. Done correctly, transferring balances from your existing credit cards to a credit card with a 0% introductory APR is a great way to save money.
Chase Slate offers a 0% intro APR for 15 months on purchases and balance transfers along with an introductory no balance transfer fee offer (on transfers within the first 60 days from account opening). After the introductory period, the variable APR will be 12.99%, 17.99%, or 22.99%, depending on your creditworthiness. There is no annual fee.
Need a long introductory period with no late fees and no penalty rates? The Citi Simplicity from Citibank (a CreditDonkey advertiser), offers a 0% intro APR on balance transfers and purchases for 18 months. After that, the variable APR will be 12.99% - 22.99%, depending on your creditworthiness. There is a 3% balance transfer fee (or $5, whichever is greater). There is no annual fee.
3. You want to improve your credit score
Because your credit score is determined, in part, by the amount of credit card debt you carry compared with your credit card limits (the “credit utilization ratio”), getting a new card can help improve your credit score in the long run. For example, if you currently have a balance of $5,000 on a card with a $7,500 credit limit, your credit utilization ratio is nearly 67%, which is considered high. By signing up for a new card, that ratio will drop.
The Barclaycard Rewards MasterCard lets you earn rewards (2 points per $1 spent on gas, grocery, and utility purchases and 1 point per $1 spent everywhere else) and helps you build credit. It reports to all three major credit bureaus and offers complimentary FICO scores as a benefit to active card members. There is no annual fee.
Plus, you usually just need average credit to qualify for the Barclaycard Rewards. If you have bad credit, consider a secured credit card instead.
4. You want a low interest rate
Chances are, the credit cards you got when you were younger, poorer, and had a less-established credit history aren’t giving you the best interest rates and credit limits. If so, it’s time to “play the field.” As long as you have a good score, apply for a card with a lower APR.
The Barclaycard Ring offers a low 8% variable APR on balance transfers and purchases, making it one of the best low interest credit cards on CreditDonkey. You can choose your card benefits and features. Plus, through the Giveback program, Barclaycard Ring members get money back for good performance. And there is no annual fee.
5. You want a fair credit card
If your old credit card changes its terms, policies, fee structures, or rewards program more often than you change your socks, it may be time to find a better match. For example, if you occasionally need cash advances, but the card keeps raising the interest rates on these transactions, you may be able to find a more suitable “partner” elsewhere.
If you’re a mature adult with a good job and a good credit score, it probably makes no sense to stick with the card you got when you were a struggling college student with no credit history. You’ll probably qualify for a new credit card with a lower APR, better rewards, and more perks. Sometimes the best way to manage your credit is to get a divorce and find a new credit card.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. This site may be compensated through the Advertiser's affiliate programs.
More from CreditDonkey:
More Articles in Money Tips
Best Credit Cards
more Best Credit Cards
What do you think about Top 5 Reasons to Get a New Credit Card?
You might also be interested in
More Articles in Credit Tips for Young Adults