5 Times You Should Say Yes to New Credit Card Offers

By Mikey Rox. Last updated 22 January 2015. 1 comment

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Nothing can be more annoying than unsolicited credit card offers filling your mailbox. Typically, I receive about five to six new credit card offers a week — a week, y'all — and I usually shred these offers without removing them from the envelope. You might do the same. However, there are times when it's okay to say yes to new credit card offers.

Not that you should go crazy and apply for every new credit card offer you receive (like I did when I turned 18: disaster!) but if you can relate to any of the following five situations, maybe it's time to explore some of those new offers.

1. You Want a Credit Card With Rewards

A no-frills credit card is perfect if you rarely use plastic or only need a basic credit card for emergencies. But if you're using credit cards more often, it only makes sense to get a credit card that offers a rewards program. (See also: Best Credit Cards With Travel Rewards)

These programs offer just that — a reward for using your credit card. And depending on the rewards program, you can earn points, miles, or cash back for every dollar you spend, which can help you score some sweet freebies or discounts. Redeem reward points for airline tickets, hotels, gift cards (I use mine for holiday gifts to reduce the hit to my wallet at the end of the year), or a statement credit.

Compare various reward programs and choose the card that best suits your lifestyle and spending habits. (See also: 13 Awesome Credit Card Perks You Didn't Know About)

2. You Want to Transfer a Balance

Paying off a credit card is much easier to say than do — especially if you're paying a high interest rate. If your credit card company charges 18% or 19% interest, and you're only making minimum payments, this debt isn't going anywhere for years.

If you have the resources to pay more each month and you're developing a debt-elimination strategy, look into credit cards that offer 0% APR on purchases and balance transfers for a specific period. It's not hard to find cards offering 0% for the first 6, 12, or 18 months. Transfer an existing credit card balance and pay it off within the introductory rate period to avoid additional interest charges. Or, if you're thinking about using a credit card for a big purchase, use a 0% interest card and pay off the purchase during the zero-rate period — it's just like paying cash. (See also: What You Must Know Before Transferring Credit Card Balances)

3. You're Hunting for a Better Rate

There's no reason to pay a high credit card rate if you have excellent credit. But no matter how long you've been a customer, or how high your credit score is, some credit card companies aren't going to budge with the rate. (See also: Best Credit Cards With Low Interest Rates)

If you carry a balance from month-to-month, you need a credit card with a low rate to reduce how much you pay in interest — aim for somewhere in the ballpark of 10% to 14%.

4. You're Looking to Improve Your Credit Score

Various factors contribute to our credit rating, and typically, the lower your credit card utilization ratio, the better your score.

Credit card utilization refers to how much of your available credit you use each month. So, if you have one credit card with a $2,000 credit limit and a balance of $1,000, your credit card utilization ratio is 50%. This is kind of high, and unfortunately, credit-scoring models penalize people with higher ratios. But if you apply and get approved for a new credit card, and this card also has a credit limit of $2,000, your credit card utilization ratio drops to 25%, which is a much better percentage and your credit score might increase. For this approach to work, you can't overuse the new credit card. If you rack up additional debt, you could end up in the same situation in just a few months. (See also: How to Use Credit Cards to Improve Your Credit Score)

5. You Want a Card That's Widely Accepted

You may prefer the limitless spending feature of an American Express, but if you're a big credit card user, you're probably aware that some credit cards aren't accepted everywhere. So, if you want to avoid an awkward encounter at checkout, you need at least one other major credit card in your wallet — preferably one that's accepted everywhere worldwide, such as Visa or MasterCard.

Do you have tales of credit card woe that you'd like to share? When has your credit card really helped you out? How can we all be more responsible with our credit cards? Join the conversation in the comments below.

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Guest's picture

Good analysis and I like the fact that you haven't fallen into the trap of advising people to avoid credit cards altogether. The truth is if used wisely you can earn money for doing nothing. I earn 1% cashback every time I use it and at the end of the year I get some get cash rewards! Fantastic, get paid to shop!!! Lol. :)