A customer handing their credit card over the counter to the cashier at a cafe.

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Here’s why it could pay to add another credit card to your mix this year.


Key points

  • A new credit card could offer you better benefits and rewards than what you have now.
  • It could also give you more spending flexibility and help improve your credit score.

You may be starting 2022 with a list of financial items to tackle, like boosting your savings, earning a raise, or getting a new credit card. Here are a few good reasons to go the last route.

1. You want a better rewards program and perks

If your credit cards aren’t the most generous with rewards, then it may be time to search for a new one. Say you drive a lot, but only get 1% cash back on gas fill-ups. Given that it’s now much more expensive to fuel your car, it pays to have a credit card that offers more bonus points or cash back at the pump.

Similarly, you may plan to travel a lot more this year. If you don’t have a travel rewards credit card, you could miss out on a host of money-saving perks. Many travel rewards cards offer free checked baggage on flights. Over multiple flights, that’s a lot of saved money. Plus, you may be eligible for other benefits like bonus miles and discounts on in-flight purchases.

2. You want cash back from a sign-up bonus

If you have larger purchases coming up, it could pay to get a new credit card before you make them — those purchases could make it possible to score a sign-up bonus.

Say there’s an offer for $300 cash back for spending $3,000 within three months of opening a credit card. If your monthly charges normally only amount to $700, then you’d be short of meeting that spending requirement. But if you plan to purchase a new laptop and cell phone because your electronics desperately need an upgrade, you could easily meet that spending threshold. You might as well get a pile of cash to help offset your purchases.

3. You’re using a lot of your credit limit and want to increase it

Perhaps you’ve run up a large credit card tab between unplanned bills and holiday spending. Coming up with a plan to pay off that debt is a good bet, but you may also want a new credit card to up your credit limit and help preserve your credit score.

One big factor in calculating credit scores is utilization, or the amount of your revolving credit you’re using at once. To avoid credit score damage, keep your credit utilization ratio to 30% or less. If you owe $3,000 on your credit cards and have a total credit limit of $8,000, that’s a utilization of 37.5%. But if you get a new credit card with a $3,000 spending limit, your $3,000 balance would only result in a utilization ratio of a little over 27%, helping your score.

Getting another credit card could open the door to more spending, so be careful. But it could also mean enjoying extra benefits, better rewards, and a generous sign-up bonus. It could even prevent credit score damage or improve your score if it recently took a hit. For these reasons, adding another credit card to your mix this year is a move that could work out well.

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