You may not know that using the same credit cards indefinitely can have some serious drawbacks. Here are five things you might want to consider before pulling out that same old credit card again and again.
1. You’ll miss out on potential sign-up bonuses
The credit card industry is incredibly competitive, which can work to your advantage. Banks and lenders want reliable customers like you and will offer enticing sign-up bonuses to get your business. If you’re sticking with the same credit card and not exploring your options, you could be missing out on hundreds or even thousands of bonus points that can be converted into travel upgrades, cashback, or even free vacations.
2. You may not get the best terms
Your credit score changes over time (hopefully, for the better), so the terms and conditions you agreed to when you had a lower score might not be as competitive as the offers you could get now. You might be eligible for more favorable terms like late payment forgiveness, better balance transfer options, extended credit lines, or other perks that you’ll miss out on by being complacent with your current card.
3. You could be overpaying in interest and fees
Like the terms and conditions, the amount you pay in interest is tied to your creditworthiness. If you’re sticking with the card you’ve had for years, you might be paying more interest on your balances than if you’d switch your payment methods up once in a while.
However, if you’re carrying balances, then you really need to consider changing your spending habits for the better since interest charges increase the cost of the things you already own. You may want to weigh the pros and cons of debt consolidation or look into methods for getting out of debt quickly to reduce the amount of interest you pay every month.
4. You might not be getting the best customer service
If you’re eligible for premium-tier credit cards and aren’t taking advantage of them because you’re using your old card, then you’re missing out on some incredible customer service options. Many banks offer concierge services for cardholders that can help you book hard-to-get reservations, find that hot toy for Christmas, and help find things to do on your next vacation.
Some credit card companies also offer increased protection for their customers, making it easy to dispute transactions, handle fraudulent purchases, or even get help with broken or damaged items that were previously charged to the card. Don’t accept shoddy customer service on your old card when there are dozens of better options out there.
5. Your credit score could take a hit
Your credit score is a crucial factor when it comes to getting approved for a loan or credit card. If you use the same credit cards indefinitely, your score could take a hit due to the number of accounts on your report. Creditors want to see that you’re able to handle multiple lines of credit or loans responsibly. If you’re only using one card, it might make things more difficult when you need a mortgage, car loan, or new credit card.
The bottom line
Overall, it’s essential to be aware of the drawbacks of using the same credit cards indefinitely. If you’re not getting the most out of your cards, maybe it’s time to switch them up!
