It’s no secret; all credit cards are not created equal. Nor are the all credit cards right for every consumer. You work hard for your money, and so you want to spend it wisely and get the most out of your cash flow. Subscribing to the wrong credit card can drain your bank account unnecessarily. Evaluate these 3 problems people often run into with their card and see if it’s time for you to break up with your credit card.
[Read: Reaping Credit Card Benefits]
You’re getting charged an annual fee, and you barely use the card.
Almost all credit cards charge an annual fee; there is no getting around it. But if you’re subscribed to a card with an annual fee that outweighs the benefits you’re getting from owning the card in the first place. It’s time to break up with your credit card. Here are some things to consider:
- You have to spend a crazy amount of money to break even with your fee.
- Your lifestyle has changed and the fee no longer fits into your budget.
- If a card is draining your funds with no rewards, it’s okay to close it. So long as your credit score is generally healthy and you are making regular payments on any debts you may have.
- Remember, if you choose to break up with your credit card, be sure to have at least one account active to keep a healthy credit score on file.
The rewards program is no longer rewarding.
Let’s face it, most of the time what attracts a consumer to choosing a card is the rewards program. However, if you are no longer in need of these rewards, are they really rewards? It might be time to break up with your credit card and consider a new card with a rewards program that better fits your current needs. Consider these situations you may find yourself in to see if it’s time to change it up:
- You have a miles card and aren’t planning on traveling any time soon.
- Your card rewards you when you go out to eat but you find yourself rarely dining out.
- You used to have a long commute so you got a card with gas rewards but now you take the train.
- Your card has a revolving rewards program and after the first rotation the rewards are no longer fitting into your lifestyle.
- You move to a new state or country where the stores, restaurants, or gas stations that you get rewarded for don’t even exist.
If you find yourself identifying with any of these scenarios, it’s time to break up with your credit card and find a program that you can actually benefit from. Not sure where to start for finding the card with the right rewards? Check out this list to help determine which rewards might be right for you.
You’re spending beyond your means.
It’s a common problem with using cards over cash; something about plastic makes us feel rich. That ‘out of sight, out of mind’ mentality takes over and you think ‘it’s fine I’ll just charge it’. This state of mind can get you in some trouble, not to mention with a lot of useless stuff you bought out of convenience or boredom. If you find yourself swipe happy, it might be time to break up with your credit card. Take a look at some of these common pit falls and see if you are guilty of over spending:
- If you’re spending more than you make then it’s definitely time to break up with your credit card.
- You’re struggling to meet your minimum payment.
- You’re buying things you don’t need, or even really want that badly.
- You’re online shopping out of boredom (we’re all guilty).
- You avoid looking at your credit card statement out of fear.
So there you have it 3 reasons to break up with your credit card. If you found yourself identifying with any of the above scenarios then you might want to consider a change. It’s never too late to make the change, and it’s never too late to start recovering. If you’ve gotten yourself into some debt for whatever reason, start making a dent in it today! There are always steps you can take to redeem yourself, and breaking up with your credit card if it’s not the right fit is one of the first and easiest steps you can take to a more responsible financial future. If you’re still unsure what to do with your current credit card situation, keep researching. Check out the informative video below with more information about breaking up with your credit card. You can never be too informed about your finances and knowing all the options you have to change is a great place to start.