Is it time to spring clean your credit card collection?
Got a wallet overflowing with credit cards? Or have some cards that have literally never left your wallet for payment? If your answer is yes to either of these questions, it may be time to spring clean your credit card collection!
To decide which cards to keep or cancel, ask yourself these four questions.
Photo via GIPHY
Thinking which credit card to spring clean? Read on to find out more!
1. Do youuse this credit card often?
A credit card is only favourable if you fully reap the rewards and benefits that come with it. This means using the card regularly to earn cashback and rewards on your spending. Otherwise, you would be accumulating annual fees or interest payments that create an extra burden on your finances. Take stock of the credit cards in your possession, identify those that are no longer useful to your lifestyle, or are rarely used, and consider saying goodbye to them.
2. Does this card benefit you?
Benefits in the form of cashback and rewards are the most attractive partof a credit card. Different cards offer benefits for different aspects,such as shopping, dining, transport andoverseas travel. Retired from the ways of a foodie or a shopaholic? Consider if you’ll still need those cards aimed at racking up rewardsfor these 2 activities.
For many cards, their welcome perks may differ greatly from their usual perks. For example, the card might afford a high cashback rate in the first 3 months as a welcome gift, which subsequently drops from the 4th month of subscription onwards. Take stock of cards that are no longer attractive to you.
If your credit card does not seem to offer you rewards that match your current lifestyle or present spending habits, consider cancelling this card and switching to one that better matches your needs.
Identify cards that benefits you the most and cards that you use on a regular basis.CardsPal is here to help you with it. Use the Cashback Calculator for recommendations on cards that give you the most cashback for your frequent spending. This allows you to compare the cashbacks on your credit cards and choose the best ones.
Amazing features of the Cashback Calculator
Moreover, you could also go to your favourite merchants’ pages on the CardsPal appand check out the top cards selected in the 3 card recommendation categories – Your Best Card, CardsPal’s pick, and No Minimum Spend.
These categories take into account factors such as the card’s discount cap, minimum spend, cashback rate, and how they compare against other cards from similar categories.
All-rounded recommendations on CardsPal
An important pointer is to make sure you’re not pooling rewards from different credit cards of the same bank. In some cases, cancelling one card may forfeit all accumulated points from other credit cards under that one bank. Therefore, be mindful of your credit card rewards before making any cancellations.
3. Am I incurring debt from my credit card?
High annual fees and interest payments may lead you to debt if they are not properly managed. If you find yourself struggling to pay high annual fees of credit cards, consider cancelling these cards.After all, the lower number of cards you have,the lower your annual fees and interest payments will be. You may also consider switching to cards with annual fee waivers tolessen the burden on your finances.
Furthermore, if the reason for large payments islate payment of credit card bills or payment of just the minimum amount,having aprudent number of credit cards would be useful in preventing you from running into debt.
Photo via GIPHY
So many interesting considerations! Have you thought about which of your card is useful?
4. How will cancelling this card affect my credit score?
When organising your credit cards, also consider how cancelling a card will affect your credit score. Consider a situation if you have 2 credit cards. Card A has a balance of $0 and a credit card limit of $10,000. On the other hand, Card B has a balance of $1,000 and a credit card limit of $5,000.
If you cancel Card A, your credit card limit drops to $5000 although your outstanding balance of $1,000 remains the same. This means that you are only utilising 20% of your credit card limit. A decrease in the credit utilisation percentage may negatively impact your credit score.
Therefore, if you would like to cancel a card, start evaluating from the most recently acquired cards instead of credit cards with a history of long-time payments.
Photo via GIPHY
Take note of how your credit card decisions affect your credit score!
Organising your cards and cancelling those that are not needed can take a load off your shoulder. As Marie Kondo would say, if it doesn’t spark joy, it’s probably time for it to go. One could do better withfewer annual payments and a lighter wallet to carry around.
Here are some final tips!
Before cancelling your card,
1. Pay your outstanding bill in full
Ensure that you pay off all outstanding payments in full before cancelling your cards. This includes pending payments that have not been posted to your credit card account yet.
2. Utilise all final rewards and points earned from the card
Don’t let those points go to waste. If you have rewards and points that have not been utilised yet, now is the best time to make the most out of your cashback and rewards before cancelling your card!
3. Cancel recurring payments
If you have recurring payments for credit card fees or annual payments, remember to cancel these payments by contacting your relevant banks. This is to ensure there will not be any automatic deductions even after you cancel your credit card.
Now feel free to go Marie Kondo in organizing your wallet! We hope this guide has been helpful for you.
Maximize Your Rewards with CardsPal
Want to maximise savings on your credit cards? Some of your cards allow you to be rewarded without paying a dime for your annual fees. Read here to find out more. If a cashback credit card is what you’re looking for, read here.And if you’re worried about expenses for your new home, check out ourdeals for household savings.
Download the CardsPal app on the App Store or Google Play Store now and get the latest deals, tailored according to the cards you own!
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “I Understand”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
Cookie
Duration
Description
cookielawinfo-checkbox-analytics
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional
11 months
The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.