Credit cards are useful financial instruments and can boost your financial health if used wisely. If you pay your credit card bills on time and in full, your credit score will improve over time. If you regularly use credit cards, your card must help you with your unique spends. If your card’s benefits don’t align with your spends, you could consider having a card that does.
You can always apply for a new credit card, or upgrade your existing one. Upgrading your credit card will help you get access to better loan deals and reward point benefits, without having to manage multiple credit cards at once. But when should you upgrade your credit card? Let’s have a quick look.
Your Credit Card Limit Is Low
If your card’s spending limit is too low, you should consider an upgrade. You could either take a new card with a higher spending limit or ask your current card provider to increase your spending limit on the same card. Getting a higher limit would depend not just on your income but also your credit profile. A good credit score along with higher income would help.
Having a higher spending limit with spends remaining at the same levels would lower your credit utilisation ratio – the percentage of your credit limit you spend in a month. A low CUR would help your credit score.
If There Is A Shift In Your Spending Pattern
With time, your income and spending habits change and so should your card. For instance, you commuted by metro when you had lower income but have now upgraded to a car with your higher income. Therefore a card that provides benefits on fuel-related spends might help you better.
You Are Eligible For Attractive Offers
If you enjoy stable income and have maintained a clean credit history with timely repayment of earlier dues, you may be eligible for attractive loan and credit card offers. Scan online marketplaces for offers you like, and make the most of them. But those who do not have the habit of paying credit card bills in time should assess their decisions of upgrading their credit cards because new debts might worsen their financial health.
You Know How to Maximise Credit Card Benefits
Each credit card provides unique benefits such as cashback, discounts, deals, freebies etc. One of the key reasons you get a new card is because it gives you benefits not provided by your current card. You must know how to make the most of your card’s benefits, and if you do, go for cards that help you access the lifestyle you want. For example, an upgraded card is great if you can keep track of your reward points, and know how to redeem them before they expire.
How Can You Apply For An Upgraded Credit Card?
You could check with your own bank or check offers on online credit card marketplaces. Pre-approved offers are generally listed in both places. You could also apply for any other card you’re eligible for based on your income and credit profile. Don’t apply for too many cards at once because simultaneous applications will hurt your credit score.
Before you finalise the kind of credit card you want to upgrade to, ensure that the benefits offered by the card are in line with your spending and lifestyle patterns.
Irrespective of the credit card variant that you have chosen to upgrade to, you need to make sure that you clear your dues in full and in time.
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