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Millions Of Americans Use Outdated Credit Cards

By , May 16th, 2018 | No Comments


Millions Of Americans Using Outdated Credit Cards

Are you satisfied with your credit cards? If so, are you convinced that your current card best fits your needs – or have you never considered other options? Many Americans tend to stay with their existing card — to the point that most use outdated credit cards.

A recent survey from CreditCards.com found that 28 percent of Americans, about 49 million, have always used the same credit card. Another 12 percent, or around 20 million, have not changed credit cards in at least a decade.

Credit card rewards and perks have changed significantly over the past ten years, thanks to increased competition.

You’re Missing Out

If you haven’t changed cards in ten years or more, you’re likely missing out on deals that can save money and prop up your budget.

According to the survey, younger cardholders are more likely to change their card. Almost half of millennials reported changing their card in the past three years compared to 42 percent of Generation X, 36 percent of the Baby Boomers population, and 26 percent of the Silent Generation.

Compared to men, women were more likely to have never changed their primary card (33 percent to 24 percent for men), but they were more likely to be tempted by better rewards (45 percent to 38 percent for men).

All About the Rewards

Rewards were the primary reason for switching credit cards (27 percent of respondents), beating out the low interest rate preferred by 12 percent of respondents.

Rewards were the favorite overall benefit for 41 percent of overall respondents, 46 percent of those aged 55 or greater, and 50 percent of those earning $80,000 or above.

It’s all about the rewards – but which ones are right for you? Everyone has their own optimum mix of type and number of credit cards, based on spending habits and needs.

Three Cards

One suggestion for consumers: Carry three cards that target different types of spending, says Sean McQuay, former credit and banking expert at NerdWallet.

“You have a card that optimizes for your favorite type of store,” McQuay advises. “Next you want a card that optimizes for your favorite [individual] store … a card that makes a lot of money back on those specific purchases. The third card I recommend is one that makes a lot of money on everything else.”

In short, optimize your credit card rewards to your typical purchases. Review your spending habits and see how well they match the terms of your credit cards. Are better options available?

If you tend to carry a balance, don’t forget to compare interest rates. Also, consider limitations and thresholds for rewards/bonuses – you could cancel out your net rewards by overspending.

Negotiate with Card Issuers

Don’t be afraid to ask your existing credit card issuer for a better deal, especially if you have competing offers in hand. Credit card companies would rather keep existing customers than recruit new ones.

Once they realize that you have gone to the trouble of researching options, they know you are serious and are more likely to offer a better card in their existing line.

Be clear about what you want and that it matches your needs – for example, a lower interest rate has little impact if you rarely carry a balance.

Keep your credit utilization around 20 percent or less of your total available credit and make all your payments on time. You’ll be rewarded with a continually improving credit score – and possibly even better offers for new credit cards. You can then evaluate the new offers and start the cycle over again.

Find better cards, use them well, and get offers for cards with even more attractive features. Repeat every year or two. You can get better rewards, lower interest rates, and improve your credit score at the same time – but only if you use the cards wisely.

This article was provided by our partners at moneytips.com. Photo ©iStockphoto.com/Stefan_Redel

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