Skip to main content

6 Signs That You’ve Got the Wrong Credit Card for You

By U.S. News & World Report

Like your old high school friend on Facebook who still has a mullet, some people have a hard time letting go.

Garages throughout America are filled with boxes of junk that will never get used, but we can’t bring ourselves to throw out, and we tend to handle our credit cards the same way. In fact, 25 million Americans have used the same primary credit card for more than 10 years and another 20 percent have never changed their preferred card, according to a survey from CreditCards.com. Sure, there’s a passionate subset of Americans who obsess over new card offers and pounce on every new sign-up bonus, but most folks don’t. We just have better things to do than worry about credit cards.

That’s certainly understandable. The truth, however, is that if you haven’t changed credit cards in the past five to 10 years, there’s a good chance the one you’re using now isn’t right for you. That may be costing you money.

Here are a few signs that your old credit card — like your high school letterman’s jacket — just isn’t a fit for you anymore.

[See: 8 Ways to Maximize Your Credit Card Rewards.]

It’s the only card you ever had. This is fine if you’re in your early 20s, when your financial situation isn’t too different than it was when you graduated college. However, if you’re 30 or older, that first credit card probably doesn’t do you justice anymore. It is likely time to graduate to a credit card with a better annual percentage rate, more lucrative rewards and a higher credit limit.

You just had a baby. First-time parents have absolutely no idea how much their lives are going to change when their little bundle of joy arrives. While you may firmly believe you and your spouse are going to keep eating at fancy restaurants regularly and traveling the world with your little one in tow, the truth is you probably won’t — at least for a while. As your life’s priorities change, so should your credit card. If you’ve been chasing miles and points and sign-up bonuses, consider a cash-back credit card that rewards you for shopping at grocery stores or department stores. It’s certainly not as sexy as saving for a trip to Croatia, but getting extra cash back for all those diapers can have a real impact on your budget.

You no longer have crummy credit. Bad credit costs a fortune in the form of high interest rates on mortgages, auto loans and credit cards. Cards targeted to folks with bad credit have APRs of 24 percent or higher — even up to around 30 percent — and often come with additional fees. They also tend to have less lucrative rewards than other credit cards. Once you’ve rebuilt your credit, it’s time to cash in on lower APRs, card protections and perks. If you feel confident you won’t be tempted by the lure of additional credit, get yourself a new card and let it work for you.

[See: 10 Completely Careless Credit Card Mistakes You’re Making.]

It is a retail credit card. Many people get their first credit card from a retailer. That’s because those cards are easier to qualify for than other types of credit cards and often come with the promise of a big discount on a purchase. The problem is that those cards can have APRs near 30 percent and typically can’t match the rewards you can get from a general-purpose card. While you might still love that retailer, your best move is to find another card with a better interest rate and better rewards.

You travel internationally and your card charges foreign transaction fees. Traveling overseas is expensive, and the last thing you want to do is make it even pricier. Using a card that charges foreign transaction fees does just that. You’ll pay an extra 2 or 3 percent on top of everything you buy while you’re out of the country — simply because you’re out of the country. Thankfully, you can now find dozens of cards that have eliminated those fees.

You’ve recently started carrying a balance and your card has a high APR. Millions of Americans are one emergency away from real financial trouble. If life throws you a curveball, and you’re no longer able to pay your credit card in full at the end of every month, that APR you never had to care about suddenly becomes an incredibly important number. Consider calling your credit card issuer to ask the company to reduce it (you’d be amazed how often that works) or get yourself a new card with a lower interest rate. There are cards offering zero percent interest rates for as long as 21 months for balance transfers. You’ll likely pay a one-time fee of 3 to 5 percent of the transaction to transfer the balance, but that is a small price to buy yourself nearly two interest-free years when times get tough.

[See: 10 Easy Ways to Pay Off Debt.]

The bottom line: As life changes, so do our needs. The same credit card you had in college probably isn’t right when you’re 30. That card you had before you started a family just might not be perfect for you once little Aidan and Olivia arrive. If you haven’t shopped for a new card in years, consider doing so now. Rewards are more lucrative and zero percent offers are more generous than ever.

When you do get a new card, your best move is probably to keep your old credit card account open — especially if it is your only card. The longer you hold on to a card with a positive history, the better it is for your credit. You can either stuff it in a desk drawer and stop using it, or you can put small, recurring charges — say, a Netflix subscription or gym membership — on the card, just to keep the account active. (One caveat: If your old card charges an annual fee, consider closing it. There’s no point in continuing to pay a $75 annual fee for a card you’re barely going to use.) Know that your good payment history of a closed card stays on your credit reports for 10 years. To keep your score high when you lose a credit line after closing a card, keep your balances on your other cards low or near zero.

Of course, if you’re uncomfortable with taking on another card for whatever reason, stick with your old card. While the right card used the right way can bring great opportunity and reward, the wrong card used carelessly can cause big problems.

More from U.S. News

What to Do If You’ve Fallen (Way) Behind on Your Credit Card Payments

Basic Money Lessons You (Probably) Missed in High School

5 Ways to Give Your Credit Score a Quick Boost

6 Signs That You’ve Got the Wrong Credit Card for You originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
Read Next Story

Related News

Frustration grows in Venezuela as earthquake death toll reaches 1,430

Israel and Lebanon sign framework agreement with US in ‘first step’ toward peace, Rubio says

Trump-endorsed populist poised to become Colombia’s next president as rival challenges vote