Credit card, also referred to as plastic money, is a financial instrument offered by banks. Credit cards are a form of debt. Credit cards can be used by borrowers to purchase goods both offline and online.
You must be extremely cautious while using credit cards as its borrowed money. The usage of credit card has a direct impact on credit score. Hence, you must be extremely careful when swiping your credit card.
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You need a new credit card for the following reasons:
If your credit score is bad, then it’s really difficult to get a new credit card. In this case, you have no choice but to opt for secured cards like credit card against FD or cards that don’t have attractive deals. You must use the credit card wisely and build a good credit score and then apply for a credit card that offers attractive deals. Improve your credit score and then apply for a credit card.
SEE ALSO: What is a Credit Card?
If lenders are offering credit cards with better deals, then it’s wise to consider applying for a new credit card. Lenders would pre-screen your profile before sending out the offer. Compare the offer that you have received with the offers on the internet before making any decision.
If your credit card interest rate is high, then you must first try negotiating with the current bank before looking out for other options. If the lender doesn’t agree to negotiate, then you must consider other options. By doing this, you are saving on high interest which could be a sizeable sum.
It’s ridiculous if your bank does not offer deals and reward points on credit cards. Today, almost all the lenders are offering attractive deals and reward points on using credit cards to spend a certain amount over a billing cycle. You must seriously consider availing a new credit card if your lender does not offer attractive deals and reward points. However, if you spend meaninglessly just for the sake of accumulating reward points, then you’ll fall into the debt trap and there’s no one to blame but yourself.
Consider the following example: you use your credit card mostly to pay utility bills and your lender does not offer much of a reward on it. But, there are lenders offering attractive deals and rewards on using the credit card to pay utility bills. In this situation, it’s only wise to consider changing the credit card. Analyze your spending habits and checkout for lenders that offer the best deals.
If the lender has not increased your credit limit for a long time, then it’s time for you to look out for other options. Some banks offer same credit limit, regardless of the borrowers’ income. Having a credit card with higher credit limit is considered good for your credit score. However, you must refrain from spending on unnecessary things just because you have a higher credit limit. Your spending habits mustn’t change on getting a credit card with higher credit limit.
SEE ALSO: Types Of Credit Cards
Many banks offer signup bonuses to new customers on spending a certain amount in the specified timeframe with credit card. Some banks offer attractive deals on spending a sizeable amount. If sticking with your current bank doesn’t make any sense, then you must consider changing the bank and choose one offering decent signup bonuses.
This is one of the most genuine reasons to apply for a new credit card. If you never had a credit card and lenders are sending out attractive deals, then you must definitely consider availing a credit card. Check out various banks and compare them before taking a decision. Check for the credit limit, grace period which is the interest free period, reward points and other offers and deals, when deciding on the bank offering credit card.
If the credit card you have is set to expire soon, then you must compare other credit cards from banks before deciding to renew the card. Other banks may offer attractive deals. If you feel that your bank is offering better deals on credit cards, then continue with the bank, else look out for better offers.
SEE ALSO: 5 Reasons To Use Credit Cards
If you have authorized too many people to use your credit card, then you can ask your lender to close the account and issue a new credit card with different account. It might be awkward to ask friends to stop using your credit card instead you can ask the lender to issue a new credit card.
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