As a member of the West Monroe Payments Practice, I work with our clients to help them develop payments strategies, products, and partnerships. As both a professional and a consumer, I am frequently asked about credit card rewards, features, usage best practices, technologies, and more. Over a series of blog posts, I will examine several of these topics in more depth.
It is estimated that over 25 million people have held the same credit card for at least 10 years. Are you one of them? Whatever your financial situation, it may be worth reflecting on whether your current card is right for you. Below are five reasons why it may be time to consider getting a new credit card.
- Your Spending Habits Have Changed
There’s a time in many young people’s lives when they spend a large percentage of their disposable income on eating out and going to bars. Maybe that’s not the case anymore. Maybe now you have a family and you’re making a weekly grocery or wholesale club visit. Whatever the case may be, that card you’ve been using may not be getting you the most rewards bang for your buck. Take a step back, think about what you’re spending most of your money on, and get a card with rewards that align with your spending.
- Your Loyalty Has Changed
Remember back in the day when you were so cool and you only shopped at PacSun? I do. Times change and so do your favorite brands. Are you loyal to a specific retailer, airline, or hotel? Examine their credit card products and consider signing up! In fact, getting a card from a brand that has a separate loyalty program (e.g., most major hotels and airlines) can help you earn rewards even faster. Beyond earning rewards from card spend, many airline and hotel cards offer perks like free checked bags or complimentary room upgrade – perks often reserved for high spending loyalty program members.
- Your Repayment Habits Have Changed
Over the course of your life, you may experience income fluctuations (for better or for worse) or you may get a little overzealous with your credit card spending. If you’ve fallen on hard times, consider transferring your existing credit card balances to a low APR card or signing up for a low APR card. Maybe your credit is so bad, you’re unable to qualify for a normal credit card and a secured card is in the cards (pun intended). On the flip side, maybe you’ve been paying on time for years and now have excellent credit. In that case, you may now be eligible for a rewards card that you couldn’t qualify for in the past. Reward yourself for being financially responsible!
- Your Lifestyle Has Changed
Maybe you are saving to send your kids to college, maybe you love football, maybe you want to travel to a far-off land, but don’t want to spend all your hard-earned dollars on plane tickets. Whoever you are, there’s a card out there for you! In fact, there are probably several cards that could fit your needs. Believe it or not, some people’s rewards cards excite them because they’re earning money towards a free hotel stay, flight, or a special experience like sideline passes to an NFL game! Whatever tickles your fancy, consider getting a card that fits your lifestyle.
- Your Rewards Card’s Value Proposition Might Be Dated
Rewards credit cards have come a long way since the launch of the AT&T card in 1990, which promised no annual fee for life. Nowadays, it’s hard to imagine that no annual fee was a major selling point. At the time, however, it was groundbreaking and consumers rushed to get the card. The AT&T program grew to over 22 million accounts in under 4 years! In today’s credit card environment, no annual fee credit cards are everywhere and they often also include rewards. For the responsible borrower, if you’re not earning over 1% in rewards, it may be time to reexamine your card choice. You can start at your own bank. There are a ton of options out there, with many large national banks offering around five consumer credit card products. If you need help picking a credit card, some banks offer questionnaires or card filters to help you choose.
Not all rewards cards are created equal and there is not a one-size-fits all “best” rewards card out there as you’ve probably guessed by now. Next month I’ll offer some advice on how to sift through the madness and select the best rewards card for you.
About West Monroe’s Payments Practice: West Monroe’s team of industry and technology experts helps our clients navigate the payments landscape by providing key insights to plan, build, assess, and improve payments initiatives. We use our uncommon blend to guide each step, from strategy formation to ongoing program management, to ensure your payments products, partners and technologies are helping you achieve your goals and meet consumer demands.