Millions of Americans have pledged allegiance to their credit cards.
About 30 percent of U.S. credit card holders have never changed their go-to credit card, according to a recent CreditCards.com survey for which some 1,700 cardholders were polled. More than 20 percent of cardholders haven’t changed their credit card of choice in five years or longer.
Sticking with the same credit card for a long time isn’t necessarily bad. In fact, opening a new credit card account might cause your credit score to dip temporarily, according to credit reporting company Experian.
Still, if you haven’t shopped around recently — comparing your credit card with others to confirm it’s the best card for you — there is a chance your loyalty is costing you money.
Here are two expensive examples of how being loyal to a credit card can cost you:
1. You’re paying a higher interest rate than necessary
If you carry a balance on your credit card — as opposed to paying off the full balance each month — the interest rate is arguably the most important card feature.
When you carry a balance over from one month to another, you are generally charged interest on that balance. Short of paying off your debt ASAP, the best way to minimize that recurring expense is to find a credit card with the lowest possible interest rate for which you can qualify.
So, if you carry a credit card balance but haven’t recently shopped around for a card with a lower interest rate, you are probably spending more than necessary on interest.
For help remedying that, check out “3 Cards With Zero Percent APR Until Summer 2020.” Or use a free online resource like Money Talks News’ credit card search tool — select “0% APR” from the menu on the left to view only such cards.
2. You’re earning fewer rewards than you could be
Folks who pay off their credit card balance in full each month don’t rack up interest charges. So, interest rates are generally not a concern for them. Instead, these folks should focus on the rewards they can earn.
If you’re among the cardholders who always pay their balances in full but haven’t recently shopped around to find the best rewards card, you’re probably not racking up as many rewards as you could be. Or, maybe you’re just not racking up the most useful type of rewards.
Credit card companies seem to constantly improve their rewards or put out new cards with better rewards. So, it pays to compare cards often.
For highlights, check out “The 6 Best Credit Cards This Spring.” Or again, try a free resource like Money Talks News’ credit card search tool. You can select a type of reward from the menu on the left — “Travel Rewards” or “Cash Back,” for example — to view only that type of card.
To learn about other unexpected ways your credit card can hurt you, check out “7 Ways Your Rewards Credit Card Is Costing You Big Bucks.”
When was the last time you switched credit cards or shopped your current card around? Share with us below or on Facebook.
Earn more interest on your savings
Are you earning as much interest on your savings as you could be? Grow your savings faster with banks offering rates that are significantly higher than the national average. Find the best rates and start earning more interest on your savings by using the Money Talks News savings account and CD comparison tool.