Home > Credit Cards > Should I Get a New Credit Card in 2016?

Comments 0 Comments

We often think of credit cards as a way to wind up in debt, but, if managed correctly, those little pieces of plastic can be powerful payment methods. Rewards credit cards, for instance, allow you to earn points, miles or cash back on purchases, while balance transfer credit cards can help consumers with big balances save on interest. Credit cards also tend to offer better fraud protection and other benefits than debit cards.

These features may have some people considering a new card come 2016. But how do you know when to add one to your wallet? Here are some things to consider.

1. Is Your Spending Under Control?

Credit cards are most beneficial when used as a payment tool as opposed to a debt instrument, so if you’re considering taking on a new card, it’s best to evaluate your spending habits. Do you make all your payments on time? Pay balances off in full? Not doing either would likely render rewards moot (thanks to interest) or negate a balance transfer offer. They could also damage your credit score. If you’re struggling to make payments and/or can’t keep your balances down, you may want to wait until your financial house is in order.

2. Can Your Credit Score Handle It?

It’s important to consider where your credit score stands before applying for a new credit card for several reasons. For starters, a good credit score generally helps you get approved for the best products on the market, and you don’t want to get saddled with an uncompetitive annual percentage rate, low credit limit or an unfavorable fee structure. Also, each credit card application can generate a hard inquiry, which can ding your score. You don’t want to apply for a bunch of cards you won’t qualify for, and want to know your score can take the small hit. You can check your credit scores for free each month on Credit.com to see where you stand.

3. Is Your Old Credit Card Not Cutting It?

Different times call for different credit cards. The balance transfer credit card you opened up last year may no longer be the best option if you’ve paid off your debts and want to earn rewards now. If your budget and credit score are in shape, and a product no longer suits your needs, it may be time for an upgrade.

Similarly, you may want to consider a new credit card if the terms and conditions of your current card are subpar or have changed unexpectedly. Your issuer may have changed its rewards structure or upped an annual fee you were ambivalent about. In these instances, it may be time to shop around for a more competitive card; just keep in mind, closing an old credit card could hurt your credit score.

Depending on your spending habits, you could keep the card open and switch to a new payment method. Or you could try to negotiate terms with your issuer. These negotiations can be helpful if there’s an expense, like an annual fee, making it hard to keep the card open. If you have a solid payment history, the issuer may waive the fee or move you to a fee-free version of the card.

More on Credit Cards:

Image: Jupiterimages

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team