Did you make a phone call to your bank and ask how much your credit card charges you monthly interest?
Alarmed, and at the same time restless for having found the reason why the amount of your balance has not stopped rising despite the payments you have made.
It’s time to change your credit card, have other options and see what they offer. Surely in the sea of offers that exist there will be a card that is for you, that is compatible with your lifestyle and that benefits and benefits between costs and benefits.
What should you observe to choose another credit card?
Thanks to a reform of the credit law promoted in the mid-1990s, the government asks financial institutions to express the cost of their financial services and products through the Total Annual Cost (CAT). Remember that the CAT is the total percentage charged by banks, which includes the interest rate and surcharges or commissions in case of late payments. This data helps you to compare in a very simple way what the cards are and their costs.
All the benefits of credit cards are accompanied by costs, to make a comparison of the benefits offered by some credit cards over others you can search Google with the title: Comparator of Credit Cards and, from the list of options that appear , visit several of the sites so you know what are the benefits and requirements of the different cards. The comparators give you a summary of the main benefits and requirements displayed in a table, where there are other cards that may be interesting for you.
Reports in the Bureau
Not only we as financial services consumers are in the credit bureau with our history, some years ago the government designed a report in which there are also more than 3,000 financial companies.
Review the behavior of the financial institution with which you want to open a new credit card. On this site are the reports of the most common faults that financial institutions have, so reviewing it can help to know what are the most common complaints of current clients of an institution.
The annuity is a fee that several banks charge for the administration of your credit line.
Did you know that your bank has the obligation to return part of your annuity if you cancel your card before the year you paid? That is, if your annuity is charged in March of each year, and you cancel your card in June, the bank must reimburse you for the proportional part of the remainder of the year, which will no longer occupy your card.
Remember that many cards have specific requirements on the income you must have in order to grant a credit card of some kind. For example, regularly, cards for market purposes classify them into basic, classic, gold, platinum, black, titanium, etc., as their names are rare metals, they try to invoke status or exclusivity and therefore their income requirements They are usually taller.
Many cards will approve you beyond the income you have, but this is where your personal filter has to come into play, do I really need this card and, above all, this line of credit? Always keep in mind that a line of credit should not be more than 30% of the income you have or even much less than that. My recommendation is to have a credit limit of 20% only.
The cards have also modified their strategies to conquer different market groups, for example, for those whose love for their soccer team means more than just watching games on television, there are credit cards with the logo of their team and with specific benefits for them. And so with other groups, such as special cards for women, for those who like to earn miles, for those who like benefits through points that can later be redeemed for products in a rewards catalog, or those who prefer discounts on chains of hotels, etc.
Normally these cards are much more expensive than the rest, so before the love to the shirt of your team, check if it is a card that has the benefits you expect and especially at what cost it would be.
Your credit history
The credit history that you carry with your current card will have great weight for the speed in the approval of your new card and the credit line that they can grant you. If you have been fulfilled with your payments, you have not had arrears and you generally pay much more than the minimum or full balances, you probably have no problem obtaining a new credit card.
Before requesting a new card
Have your balance in zeros
In order to cancel the card you no longer want, you can do two things:
- Settle the total balance you have on the card and ask for the cancellation.
- Transfer the balance you have on this card to the new card and when the first one is in zeros, ask for cancellation.
When transferring the balance from one card to another you can have greater benefits, such as:
A. Decrease the interest rate. Normally, an advantage offered by the new cards is to have a preferential interest rate, in order to more easily settle the debt that they absorbed from your old credit card.
B. Have a better payment term. Whether the term you have increases but with smaller amounts or decreases with amounts affected with a lower interest rate. Any path that suits you best so you can pay comfortably and finish with that balance soon.
C. Consolidate all your debts into one card. If there are several cards that you intend to withdraw to have only one that allows you to see your total debt, it is a great idea to better manage the amount you owe, instead of having it scattered.
Before you order a new card, with a good relationship between the benefits you are looking for and its costs, unsubscribe the card you currently have. Having several active cards at the same time might seem like a benefit and a convenience, but at the same time it is a risk, since using them will leave you with the worry of not only paying off a simple debt, but also of having a double.
Trying to cancel a card could bring you benefits
When you have made the decision to change cards you have to make a call to your bank to confirm that the card you are going to cancel has the balance in zeros and say that you have the desire to cancel it. This is a decisive moment for you; The operator who has answered your call has only one objective: that you do not cancel your card, and will do everything possible so that you do not do so, it may even happen to you with another executive who will try again. In some cases, depending on the type of customer you are and the history you have with your card, the bank will even try to offer you benefits that you didn’t have before, all for the sole purpose of not getting lost. This, as I was saying, is an important moment, because even the promised new benefits could be better than those of the card you are contemplating.
Don’t end up with more cards than you need
If you end up convinced not to cancel the card you currently have, I hope that at this point you have not registered a new card. Remember that having a greater line of credit means that you have the possibility of falling into a greater debt, so before taking the step of exchanging one card for another, you must first cancel the one you have.
Always looking to have the number of cards that fit your creditworthiness; Having many cards also requires more resources for your administration, you have to spend more of your time to always be aware of your different cut-off dates and the balances you have with each one, which at the moment can increase the risk of leaving spend some deadline for payment and therefore have to bear surcharges or late fees.
The final question I leave you would be, do I really need a new credit card? The answer to this is only you.