Are you considering getting another credit card? There are many reasons why this may sound like an appealing idea. Depending on your situation, it might be the perfect time or it may be better to wait a bit.
Reasons to Get Another Credit Card:
There are several reasons why opening a new credit card can be a great option for you. While these will depend on your situation, here are some great reasons to get a new credit card:
Some credit cards offer great rewards options that can help you earn and save while you’re spending. Whether you’re looking for cash-back offers, rewards points, or airline miles, there are a variety of rewards cards to choose from. Just make sure that you select a new rewards card that offers rewards that you'll actually use. A good offer isn't a good offer unless you plan to utilize those rewards!
If you keep a balance on your credit card while making your minimum payments, it could benefit you to find a new card with a lower interest rate. This will help you save money in the long term and may make it easier for you to pay off that balance if you choose to transfer that over. If you choose to split your balance between cards while maintaining the same or a lower level of spending, this could also lower your utilization rate on those cards, which in turn could potentially help your credit.
Reasons to Wait:
While it’s tempting to get a new credit card, especially with some of the great offers, there can be important reasons to hold off on getting your new card just yet.
Low Credit Score
If you have a low credit score, you may find it difficult to qualify for another credit card or that the interest rate on the card is higher than what you're looking for. Rather than immediately getting another credit card, take time to make regular, consistent payments on your original credit card and any other loans you may have. You may start seeing a difference on your credit from doing this in as little as three to six months.
Do you have plans to get an auto loan, mortgage loan, or even refinance your loan in the near future? It may be worth waiting to get the credit card. If you are in the process of getting a loan, getting a new credit card can directly impact your ability to qualify for the amount you want or even to receive an approval on the loan. If you are currently getting another loan or will be in the very near future, it’s best to avoid getting a credit card right now.
Your spending habits will directly determine your financial readiness for another credit card. If you are struggling to make your payments on your current credit card or feel that you are unable to control your non-essential spending, it may not be wise to open a new credit card. This could result in taking on more debt or dealing with a payment that you are unable to afford.
If you’re considering a new credit card, it’s important to take a look at your finances and make sure it’s a good financial choice for you. If you already have several credit cards, you should also consider how many credit cards you should have. Once you decide to proceed with a new card, be sure to look for cards with rewards that you’ll actually use, great interest rates, and a financial institution that you can trust.