3 Things You Should Know When Accepting a New Credit Card Offer

2 minutes

There’s a good chance you are seeing more credit card offers than ever. With so many offers floating around, you may be wondering if now is a good time to take out a new credit card.

Given the rewards being offered, ranging from hotel rooms to flights to cash back on gas and groceries, competition is definitely high among card issuers and banks. Before you make the move to take out a new credit card, however, it’s a good idea to be prepared in order to make sure you find the best deal. The tips below can help you sort through your offers.

1. Loyalty Pays Off

Before you begin looking elsewhere, keep in mind that banks that you already do business with may actually provide you with additional perks if you opt for their credit card. For instance, Bank of America tends to offer extra points on purchases and travel rewards for credit card holders who also have an active Bank of America checking or savings account. If you have a Wells Fargo bank account, you can apply the rewards to your bank account, with such options as paying down your mortgage, or redeem your rewards at one of the bank’s ATMs.

2. Be Cautious with Multiple Credit Cards

A number of savvy consumers are now applying for multiple cards in order to get the most out of cash-back perks and travel rewards, but before you try this strategy, make sure you know your own spending habits. It’s also important to make sure you are able to organize well or you could find yourself in financial trouble. In order to obtain the perks offered, you must meet a minimum spending threshold. For instance, with some cards, you might be required to spend $3,000 or more within the first 90 days you have the card in order to qualify for the reward. When handled properly, this strategy can be quite lucrative. If you’re not able to organize well and track your spending, however, overspending on a credit card just to get a reward could spell trouble quickly and likely won’t be worth the reward.

3. Take Care with Intro Rates

It’s also become quite popular for consumers to take out a new credit card with a 0 percent interest introductory rate in order to pay off existing credit card debt. If you’re able to pay off the existing debt within the introductory period, this could be a good way to pay down your debt quickly. Keep in mind that you will likely need a certain credit score in order to qualify for this type of card. Furthermore, it is only an introductory period. If you don’t pay off the balance within that period, you could find yourself facing an even higher interest rate.

When researched and planned properly, taking out a new credit card could be a good way to manage your finances.

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