3 Reasons You Might Want To Dump Your Credit Card

(Ben Schumin)

While it’s not always a good idea to get rid of a bunch of credit cards all at once, some of that plastic in your wallet may not be offering you the best possible credit.

Credit.com has a rundown of multiple reasons you might want to move on from an old credit card account. Here are some that we found particularly interesting:

1. Your credit has improved since you opened the account

Maybe you got that credit card at a time in your life when your credit report wasn’t pristine or when your credit history was lacking. While your credit may have improved and your history now shows that you pay your mortgage, car loan, and other bills on time, you are probably still paying the same interest rate on that card as you were when you got it.

As we told you before, you may just be able to ask your bank to look at your payment history and adjust your APR accordingly, but some banks won’t do it.

If you have multiple credit cards, check the interest rates to see how they compare to each other. If you have cards with sufficient limits and lower interest, then it may be a matter of just closing that old account.

If the old card is your only credit account, you may want to consider applying for a new card with a lower APR. Once you have that, you can close out the old one or just keep it open and don’t use it (so long as you’re not paying an annual fee).

2. You are not receiving competitive rewards

Debit card rewards have all but vanished as swipe-fee reform has cut down on the money banks can charge retailers for debit transactions, but rewards competition has only increased on the credit card side as card issuers try to lure consumers away from the competition — and away from using their debit cards.

So again, some card you may have acquired a few years ago might no longer be offering you the same rewards that you now can get elsewhere. If your card gives you 1% cash back, you can almost definitely shop around and find one that offers more, or one that offers an even larger percentage on certain purchases.

Just be careful of annual fees, as they eat into the value of your rewards. And always be aware that carrying a hefty balance on a rewards card can ultimately negate the benefits of those rewards as you could end up paying more in interest than you’ll earn in cash back or travel/hotel points.

Credit.com’s Jason Steele notes that if you’re looking to switch between rewards cards offered by the same bank, you may be able to migrate your account over to the newer one without having to cancel the old account.

3. Customer service isn’t helpful

What good is a card with decent APR and solid rewards if you can’t get anyone to help you when there’s a problem?

Some card issuers customer service reps may treat you like they’re doing you a favor by taking your money, but the fact is there are a lot of fish in the credit card sea.

“With so many banks and credit unions fighting for your business, there is no excuse for a company to leave its account holders less than satisfied,” writes Steele.