If you have a to-do list, the one thing that won’t make it to the list is looking for a new credit card. It won’t make it to the list simply because most people don’t know when they should look for a new credit card.

The truth, however, is that there are many instances wherein you should look for a new credit card (and no it isn’t when your card is close to expiring). Here are 5 signs that it’s time to look for a new credit card:

The Rewards Don’t Match Your Spending Pattern

Let’s say that your card gives you 5 reward points each time you spend Rs.200 on dining and 1 reward point each time you spend Rs.200 on all other retail transactions. Now, if a major portion of your monthly income goes towards groceries and departmental store spends and a negligible amount is spent on dining, you are already losing out.

What you should be looking for instead is a card that rewards your grocery spends. It could be in the form of cashback or reward points. The point is, the rewards on your card should complement your spending pattern.

Your Spending Pattern Has Changed

Continuing from the point above, let’s say that when you first got your credit card it complemented your spending pattern. But over the years, the way you spend and the things you spend on have changed. Well, in this case, you should be on the lookout for a new credit card.

Why?

Well, think about it. If you are going to charge expenses to your card, you might as well get something out of it, right?

The Annual Fee Is Too High

When it comes to annual fees, the most important thing to remember is that it is worth holding on to a card only if the perks of using the card outweigh the cost of owning the card. So, if the annual fee on your card is Rs.499, but the maximum cashback you can earn each year is capped at Rs.350, you should consider getting a new card.

Similarly, if you have a premium credit card with an annual fee that runs into thousands, but you don’t make use of any of the perks that come with the card, consider getting a new one. The simple reason being, a credit card, when used wisely, is a tool that allows you to save. But if you don’t use it the way it should be used, the annual fee you pay is just a drain on your wallet.

The Interest Rate Is Too High

Most of us don’t pay attention to the interest charged on our credit card because the assumption is that we will pay our bills in full and on time. The truth, however, is that there may be situations wherein this may not always be possible.

As such, you will be charged interest.

Interest rates on credit cards in India can range anywhere from 2% per month to around 4% per month depending on the type of card you have.

If you find that more often than not you are unable to pay your bills in full and on time, and you are paying quite a bit as credit card interest, get another card. There are plenty of cards out there with low rates of interest to help you manage your finances better.

In fact, if you are carrying a significant amount of balance on your card, consider transferring the amount to a card that provides a balance transfer feature. In most cases, card issuers who offer balance transfer facilities will provide let you move the balance on one card to that of another at 0% interest. This 0% interest is usually for a fixed period of time (like 6 months) but is a great way to get your finances back on track.

There are Attractive Sign-Up Bonuses Available

The credit card industry is quite competitive with each bank looking to get you to apply for their credit card over that of another bank. In order to ensure that you apply for their credit card, banks generally offer attractive sign-up bonuses.

These welcome offers can include a large number of reward points or miles or even gifts such as vouchers or expensive gadgets.

In fact, if you are a frequent traveller or are looking to travel in the future and you find a credit card that is offering you tens of thousands of points as a welcome gift, you should consider it. This sign-up bonus will let you start collecting points at a faster rate. This means that you can transfer your points to your chosen airline’s frequent flyer programme faster and get that free ticket to the destination of your choice.

If you have experienced any of these 5 points mentioned, then you know that it is time for you to look for a new credit card. Don’t stick with your old credit card just because it feels familiar since it could be costing you more than it is worth.

This being said, a long-standing credit card which you have used well will have positive implications on your credit score. So, if you are looking for a new credit card, don’t deactivate the old one (unless it’s getting too expensive to keep). If you retain your old card and get a new one, you will not only be getting a card that matches your spending pattern and rewards you, but you will also be increasing the amount of credit extended to you. This has positive implications on your credit utilisation ratio which, in turn, positively impacts your CIBIL score.

So, all in all, it’s a win-win situation.

Vaibhav Bagga