Do you remember the last time when you checked whether your current credit card aligns with your spending habits and financial status?
If you are an average consumer, then it’s likely that it’s been quite long.
A new study has found that more than 20% of the credit card holders use a card which does not align with their spending habits. Also, 30-50% of card holders are using the right card but they can get a better credit card too.
You pay an annual fee
There are cards that have no annual fee and if you’re paying an annual fee then the benefits of that card should outweigh the annual fee. If you have less expenditure and spend very less money then there is no point in holding on a card with annual fee. Also make sure that the benefits of the card are actually useful to you.
You are carrying a balance
Least possible interest is what people who are carrying balance should aim for. The best options for such people are credit cards with introductory financing offers, credit cards from credit unions, and balance transfer credit cards.
You are spendthrift
If you make big purchases with your credit cards, use it for frequent travel or business expenses or you just simply spend a lot, then make sure your rewards program is equally good. You credit card should align with your big spends and have all the other benefits you prefer. For example, some credit cards pay big rewards on travel, while some pay big rewards on fuel, and some are suited for business transactions.
You are a frequent traveller
These kinds of spenders should possess a credit card which fits both their spending habits and their travel style. There are many credit cards which have perks like upgrade of seat, TSA PreCheck, and access to airport lounge. There are premium travel credit cards for those people who want luxury. Other cards have bonuses that can be turned into huge airline miles or hotel points.
Majority of cards will also give you great rewards for making purchases within certain categories. Make sure your credit card takes care of that too.
You have no idea about your rewards program
If you don’t use your credit card reward points or your points accumulate slowly, then it is better that you shift to a cash-back credit card. They are better than waiting for points to collect and make reward redemption easier.
Your credit score or income got a raise
Better credit score and income means better repaying ability. Banks will be interested in giving you the least interest rate and the best credit limit. You should talk to your bank for more information.
The last tip is to not close your old credit cards unless they have an annual fee even if you won’t use them. The aged credit cards increase your CIBIL score. There’s no harm in using multiple credit cards as well. Use more than one card for more than one need.