49 million credit cardholders have never changed cards — and suffer high APR, a lack of rewards and lower credit scores.
Take charge of your credit.
According to a new CreditCards.com report, 49 million credit cardholders have never changed their favorite credit card, and another 20 million haven’t done it in at least the last 10 years.
But millennials are a bit more finicky when it comes to tending to their finances. Nearly half of those surveyed ages 18-37 changed their go-to credit card in the past three years, and 36% of Baby Boomers and 26% of the Silent Generation said the same — while overall, women were more likely than men to say that they had never changed their primary card.
So why don’t people explore the multitude of available card offers more frequently? There’s certainly no shortage of appealing offers with low or no interest, free trips, cash back and other impressive rewards. However, it seems the most obvious reason people stick with the same card year after year is their loyalty to specific programs.
Matt Schulz, senior analyst at CreditCards.com, tells Moneyish, “The right credit card for you is the one that best fits your lifestyle. A 10-year-old credit card, much like a 10-year-old jacket or pair of pants, probably doesn’t fit you very well anymore. If you shop around, you’re likely to find one that matches up better.”
For those on the fence about applying for a new card, considering attractive tactics like sign-up bonuses, earning points or miles, and racking up rewards in record time can mean making money while spending money (as long as you pay off your bill in full and on time each month).
And now is as good of a time as ever to make the switch. “If you’ve only had one card for your entire adult life, it’s probably time to change. That first card probably had a high APR, lots of fees and crummy rewards. Your first card is meant to be a stepping stone to help you build credit so you can move on to a better card with friendlier terms and more lucrative rewards — it’s not meant to be your forever card,” says Schulz.
One of the biggest misconceptions about applying for a new card is the fear of damaging one’s credit. But Schulz says, “The opposite is more likely to happen. For example, a new card adds to your credit limit, which helps your credit utilization rate. That rate compares your debt to overall available credit and is the second-most important factor in credit scoring, only trailing your payment history.”
Because there’s an overwhelming amount of credit cards available, Schulz recommends using a tool like CardMatch, which matches you with cards that are a good fit based on your credit profile. To make sure you end up with the card that makes the most sense, ask yourself how you plan to use the card and what you want to get from it. Do you want cash back or miles? Do you spend more on gas and groceries, or dining and travel? Are you building credit or just chasing rewards? Answering these questions will help guide you toward the card that can yield the most return for your lifestyle.
You also don’t need to close one account to open another. “The longer your positive history with a credit card, the better it is for your credit. That’s why you should generally never close a credit card unless it comes with an annual fee. You’re better off holding on to the card or stashing it in a desk instead,” Schulz says.
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