Credit Cards (US)

When is it time to get a new credit card?

Do you have a credit card and use it correctly? Come check out our best tips for a healthy use, also find out when it´s the best time to get a new credit card

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by Thais Daou

Published on 09/26/2021

Learn when is the best time to get a new credit card!

Is it time to get a new credit card? Source: Unsplash
Is it time to get a new credit card? Source: Unsplash

We are sure that everybody knows how handy credit cards can be. However, it is not always that this money in form of plastic means the same as sound financial decisions. In other words, people are so enthralled by the concept that they can buy something without having to pay for it that they forget about the bills. As a result, they end up as hostages of this handy system.

Today, our team wants to explain to you when to use credit in your life. In this article, we will also show you how to save money with credit cards. That is, if this is the best option for you right now. So, let us take a look at the benefits and drawbacks of owning a credit card.

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The pros of having a credit card

First of all, let us start by giving you a list of the advantages one can have when acquiring a credit card. Here is our list of five great benefits:

It is safe

Carrying cash is riskier than using a credit card. You can utilize it instead of going to an ATM or bank to get cash in the event of a financial emergency. Most are also protected against fraud, loss, and theft, which can help to avoid troubles in many circumstances.

Installments

A credit card can be an ally in emergency expenses or larger purchases because it offers interest-free installments. In many circumstances.

Bonuses and rewards

Some credit cards give you points and travel rewards based on your spending, which you can then redeem according to the card issuer’s terms and conditions. So, to get the most out of your card, see if it offers this benefit and if so, what the limitations are.

Credit profile improvement

One of the most important advantages of having a credit card is that it can help you enhance your credit score and credit profile. When used on a regular basis and when debts are paid in full, lenders will know that you can be trusted. So, use it wisely.

Convenient online shopping

The advantages of credit cards extend beyond the ease with which you may use them to make everyday transactions in physical stores. They are also a lot easier to utilize on the internet. This might be a terrific method to save time when shopping if you choose a reputable website.

The cons of having a credit card

Now, here are two big risks of using a credit card wrongly:

The desire to spend more than you should

Studies say that people spend more when they have a credit card in their hands. It is simpler when they do not experience having money taken from their wallet. This could explain why some people have so many debts.

The risks of having too many debts

When you borrow money, you are putting yourself in debt. The more you borrow without repaying it, the more debt you accumulate.

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How can you get your credit card request approved?

Here are two basic steps to get your request approved:

1. Know your credit score

There are credit cards for all types of profiles! So, once you know your profile, you can look for the card options available to you. Basically, a score of 800+ is considered exceptional; from 740 to 799, excellent; from 670 to 739, good; and from 580 to 669, fair credit. A score of 579 or lower is considered poor.

2. Have a steady income

Credit card companies have their own terms and conditions when determining what type of income must have to qualify. You do not need a high income or full-time job, but having a steady income helps.

What is the ideal credit card limit for you?

It is time to get a new credit card! Source: Unsplash
It is time to get a new credit card! Source: Unsplash

Your credit limit should not exceed 30% of your family’s income. This keeps you from succumbing to temptation. However, if you need to buy a new refrigerator using your credit card, having a credit card with a higher limit than your income is beneficial in these circumstances. But avoid making new purchases while you still have installments. Before starting another installment, wait until the previous one is completed.

Finally, it is easier to restrain spending if the credit card limit is set at 30% of income.

When should you replace your credit card?

It is true that we tend to use a credit card for a long time and end up forgetting that the plastic will eventually need to be replaced. Because its chip, like the magnetic stripe, begins to deteriorate over time.

So, before this does happen, before asking for a new piece of plastic, try to search online, or here at Mister Finance, to see if there are better offers that you could benefit from.

Does cancelling a credit card hurt your credit score?

It may be time to get a new credit card! Source: Unsplash
It may be time to get a new credit card! Source: Unsplash

Can we tell you a secret? Don’t tell anyone! If you desire to cancel a credit card, it will be better to keep it even though you will not use it. However, in general, canceling a card may or may not hurt your score. It will depend on your credit habits. For cards being closed in age, the effect is minimal.

How many months before you can get a new credit card?

Did you know that a percentage of your credit score is based on new credits? When you apply for one, lenders conduct a credit inquiry on your report. After each credit check, your score tends to dip. However, it usually bounces back quickly.

Say that you applied for too many credit cards at once. Then, your score could take a more significant hit. This is due to the fact that a lot of recent credit inquiries may be a signal that you might be wanting to buy a lot, thus having a lot of debts.

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About the author

Thais Daou

Thais Daou holds an undergraduate degree in Languages — Translating and Interpreting from the São Judas Tadeu University. She has been translating, proofreading, and transcribing financial documents, as well as documents from other fields, for five years. And now she begins a new chapter in her career, writing about financial solutions in a simplified way, with a desire to spread this knowledge, which is so important.

Reviewed by

Aline Barbosa

Senior Editor

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