If you’ve had the same credit card for many years that is good for your credit score but you might not be getting the best interest rates or rewards available. Now might be a good time to shop around for a new credit card.
Here are 5 tips for shopping for a new credit card:
- Rate or Rewards? - The first question to answer is do you carry a balance and thus need a balance transfer credit card or low interest rate card? Or do you pay off your card every month, making you better suited to a cash back credit card or a rewards credit card, which typically have higher rates?
- Timing is important - If you are hovering between fair and good credit you might not want to take the hit applying for credit will put on your score. Also, if you are planning to apply for a mortgage you should really focus on paying off debt and making sure your credit utilization ratio is under 30% for any given account as well as across all of your credit cards to improve or maintain a solid credit score.
- Compare Fees - Most credit cards have a number of fees to watch out for. Annual fees are the cost of just having the card. Balance transfer fees mean the zero-percent transfer rate isn’t truly zero but you still usually come out ahead in the long run. Late payment fees and cash advance fees are others you should be aware of.
- Use your old cards - As long as your older cards don’t have annual fees, you shouldn’t close them after getting a new card. You should also try to use them once in a while and pay off the balance right away to keep them active. This will keep it active as a positive history helps your credit.
- Contact your credit issuer - Once you’ve found a card with terms you like you can always ask your current credit issuer if they will match the rate and fees of the new card. They might be able to make some changes to your account to keep your business.