When you’re first starting out, you have limited options when it comes to credit cards. In order to build up your credit, you may have to settle for a card that has less than desirable terms. After a few years, you’re eligible for better deals, but it can be hard to let go of the card that was so good to you. Use this criteria to help you determine whether or not you should switch your credit cards.

Why Stay

One of the factors that determines your credit score is the length of time you’ve had a particular card. Canceling a card that you’ve held for a long time in favor of newer cards can actually hurt your credit score, which is something that few people want to do. This is one of the best reasons to hang on to the card that you’ve been using a little longer. You may also simply like the card you have. For example, if both your checking account and credit card are through the same bank, it’s easy to see all of your data in one place and to make payments online almost instantaneously. Your current card may also offer benefits you like, such as airline miles or cash back that you can use toward paying off your student loans.

Annual Fees and Interest Rates

If your card has an annual fee and high interest rates, though, it could be holding you back. With the wide variety of credit cards available without annual fees, it’s hard to keep paying for a card if it’s not offering you a special benefit. An annual fee may be the single most important reason to switch cards. Why keep a card with an annual fee if you can qualify for a card without one?

Also, if you have credit card debt that you’re trying to pay off, it can be difficult to keep things under control with a high interest rate. Since many cards offer zero-percent introductory rates, switching to a card like at is a good idea if you qualify. Even while making the same monthly payment, you’ll be able to pay the debt off more quickly if you aren’t paying interest.

Streamlining Card Management

As you start to get more credit cards, you may find that your higher credit score means that you qualify for cards with higher limits. For example, if your first credit card had a limit of only $500 and the next two cards you get have limits of $3,000 and $5,000, it can seem silly to hang onto the card with the $500 limit. The limits on the other cards are high enough that they’ll cover you in case of emergencies, and you may simply want to cut back on the number of cards you have to check in on each month. By canceling that older card with the low limit, you have fewer cards to manage, which makes things easier for a lot of people.

Better Offers

Many people find that over the years, they simply start receiving much better offers on credit cards. If the current card has an interest rate of 25 percent and newer cards are offering rates of 10 percent, it just makes sense to choose the card with the lower interest rate. Even if you’re good about paying off the balance in full each month, emergencies can strike at any time. If you’re stuck making payments on a high balance, you want the interest rate to be as low as possible. However, you should carefully read the terms of any credit card before you accept the offer. Cards with low introductory rates sometimes have a high jump in rate once the introductory period ends. Sometimes, cards only waive an annual fee for the first year and you’re on the hook for it every year after that. If you’re not paying attention to what’s going on with your cards, you may end up paying a lot more than you thought you were.

Before You Go

Even though there are plenty of good reasons to switch credit cards, it’s still a good idea to think long and hard about the process before making a firm decision. After all, canceling an old card can negatively affect your credit for a while. Instead, think about the reasons why you’re looking elsewhere. Call up your current credit card company to see if they’re willing to match or beat the other offers. Once a credit card company hears that you’re thinking about leaving them, they’re often eager to drop the interest rate or increase the credit limit. Some might even waive the annual fee.

You should also remember that you can have more than one credit card. If the current card doesn’t have an annual fee, it doesn’t hurt you to hold onto the card and simply not use it. You can keep the old card and still apply for and use the other credit cards are your preferred method of payment. This allows you to reap the benefits of both your longer relationship with the old card and the better terms of the new card. Whether you’re opening a new credit card account or closing an old one, your choices often have a big impact on your credit score. Understanding the potential consequences of your actions is the key to making the right choice. For some people, sticking with an older card is the best move. Others have found that it’s time to make some changes. The choice is an individual one, and you’ll be able to make the best decision for you if you take the time to do your research.

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