5 Signs You’re Ready for a Credit Card Upgrade

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So you’ve been using your first credit card for some time now, and have been thinking of upgrading your card. Whether you’re looking to increase the credit limit on your current card or getting a second card with better features and offers, there are a few things that you need to take care of first.  

Remember, a credit card with a bigger credit limit or better perks like faster air miles conversion rate or increased cash back rewards may involve larger spendings or higher annual fees.

Nevertheless, you’ll be wise to check out these 5 signs to see if you’re really ready for a credit card upgrade:

1. Your income has increased

You’ll be better positioned to use a card with higher credit limit or enhanced reward programmes if your income has increased since your first credit card application. Fatter paychecks getting credited to your account every month assures banks that you can easily manage a credit card involving more money.

Also, credit cards with better features often come with higher income requirements. So your last salary hike may have actually made you eligible to own your chosen credit card.

Related4 Reasons Fresh Graduates Should Upgrade to a Credit Card From a Debit Card

2. You’re consistent in your repayment

To get on the bank’s good side, make sure you’ve been consistent in your repayment. If you’ve managed to make your payments in full on time for a year or more without being trapped in a cycle of paying your late payment charges, it could be a good sign that you deserve that upgrade.

Related6 Smart Credit Card Habits for Youngsters

3. You’re a reward-savvy card user

Keep in mind, not all credit card rewards may suit your lifestyle. Image source: Pixabay / Pexels

Using your card the wrong way could cost you a lot. Cardholders need to be savvy with their cards to maximise the benefits offered, even if it’s a basic credit card. If you’ve mastered the art of getting even more value from your card by leveraging the loyalty benefits. you know you’re good enough for an upgrade.

Another thing that you must keep in mind while choosing a particular credit card for an upgrade is — not all reward programmes may suit your lifestyle. For example, if you’re not an avid traveller or do not plan to travel outside Malaysia in near future, an air miles credit card may not be of much use to you. Instead, a credit card with cashback on petrol, grocery or online purchases may suit your requirements more.

RelatedHow to Make the Most of Your Rewards Credit Cards

4. You have in place a substantial emergency fund

In the event where you’re faced with a major unexpected expense, you know you have yourself covered when you’re able to turn to your emergency fund rather than use a credit card to deal with the financial blow.

Stashing extra cash for a rainy day means you’re financially responsible to take on sudden, unexpected expenses without depending on additional credit which in turn can further dent your monetary condition.

Related: Emergency Fund: Why You Need It Now, and How Can You Build One

5. You’re good at managing your money

Maintaining a steady cash flow to a savings fund by controlling unnecessary expenses forms the backbone of our financial health. If you have been able to save money month after month after keeping a firm check on your expenses, you, in all probability, are ready for a credit card upgrade and reap the benefits of enhanced reward programmes.

Related7 Simple Tips To Prevent Credit Card Fraud

Top benefits of upgrading

There are some pros to upgrading your credit card, such as:

  • You’ll learn to get better at managing cashflow – It might be challenging to juggle between different payments, but you’ll still learn to get even better at managing your cash flow. To make it easier for you, your new card should have a different billing cycle than the other card. For instance, if you’re billed every end of the month for your current card, see if you can have your new card billed in the middle of the month.  
  • Get loans faster and easier – If you’re a responsible cardholder, you’ll be seen as a good borrower by lenders and your credit score will improve. This will help you in getting your chosen loans approved faster.  
  • Transfer your balance to save money – If you’re carrying a balance on your current card, you may be able to save money by transferring the balance to your new card.
  • Better value for each spending  – Your new card will probably come with an extensive list of great rewards and offers that your current card doesn’t provide, like dining deals, cashback, air miles, shopping or petrol rewards.

The best time to upgrade

In order to qualify for an upgrade, you’ll need some time to build your credit history, so wait at least six to 12 months after you’ve owned your current card before applying for an upgrade.

To increase your eligibility, avoid maxing out your current card and missing payments. Also, it’s best if you don’t apply for other loans at the same time.

Check out some of our blogs that will help you choose your next credit card:

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