How to know when it’s time to give up your startup credit card

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When you get your first credit card, you probably don’t get a card with the most lucrative welcome bonus or the highest categories of rewards. Your card can be a secured credit card, which requires you to deposit a deposit that acts as a guarantee, or a student-only card.

While these cards are a great way to start building your credit history, you’ll likely reach a point where you want to upgrade.

People should switch from their first card when they’ve gotten into the habit of paying their monthly balances on time and in full, says Roger Ma, Certified Financial Planner at lifelaidout® and author of “Work Your Money, Not Your Life.

Once you know how to be a responsible credit card user, it might be time to get a new card, especially if you have a better credit score than when you opened your first card. Here are some things to consider before you get started.

Can you upgrade your starter card?

If you have a secure card, you may be able to easily upgrade it after a few months of responsible use. The Discover it® secure credit card, for example, allows you to switch to an unsecured card eight months after opening the account. Discover will review your payment history and decide whether to return your $ 200 deposit and transfer you to an unsecured card.

While the Discover it secure credit card offers cardholders 2% cash back at gas stations and restaurants, up to $ 1,000 per quarter and 1% on all other qualifying purchases, this does This might not be a great option for you if you want more rewards or need a higher credit limit.

Discover it® secure credit card

On the secure Discover site

  • Awards

    Earn 2% Cash Back at gas stations and restaurants on up to $ 1,000 in combined purchases each quarter. Plus, get unlimited 1% cash back on all other purchases – automatically.

  • Welcome bonus

    Discover will match all of the cash back rewards you’ve earned at the end of your first year

  • Annual subscription

  • Intro APR

  • Regular APR

  • Balance transfer fees

    3% introductory balance transfer fee, up to 5% fee on future balance transfers (see conditions) *

  • Foreign transaction fees

  • Credit needed

Should you close your first credit card when you open a new one?

You shouldn’t close your first credit card because the length of your credit history is 15% of your FICO credit score, and it’s affected by three factors: the average age of your accounts, the age of your oldest count and its duration. since you opened an account.

If you close your account, you will negatively impact the average age of your accounts and the age of your oldest account and undo some of the positive work you did by opening a card in the first place.

Ma recommends that if you plan to keep your card open, you should monitor it periodically to make sure there are no unauthorized expenses. You’ll also want to make sure you use it every now and then, otherwise the transmitter might shut it down due to inactivity.

What type of card should you open next?

Wells Fargo Active Cash Card℠

  • Awards

    2% unlimited cash rewards on purchases

  • Welcome bonus

    $ 200 cash rewards bonus after spending $ 1000 on purchases in the first 3 months of account opening

  • Annual subscription

  • Intro APR

    0% APR on qualifying purchases and balance transfers during the first 15 months from account opening

  • Regular APR

    14.99% to 24.99% variable on purchases and balance transfers

  • Balance transfer fees

    3% launch fee ($ 5 minimum) for 120 days from account opening, then up to 5% ($ 5 minimum)

  • Foreign transaction fees

  • Credit needed

Another popular flat-rate cash back card is the Chase Freedom Unlimited® Card, which offers 5% cash back on trips purchased through Chase Ultimate Rewards®, 3% on meals (including take out) and pharmacies and 1.5% on all other purchases. The Chase Freedom Unlimited also currently offers a grocery store benefit where new cardholders can earn 5% cash back on grocery purchases (excluding Target® or Walmart® purchases) up to $ 12,000 in the first year. .

Chase Freedom Unlimited®

  • Awards

    Earn 5% cash back on grocery store purchases (excluding Target® or Walmart® purchases) up to $ 12,000 spent in the first year, 5% cash back on trips purchased through Chase Ultimate Rewards®, 3% on meals (including take-out) and pharmacies and 1.5% on all other purchases

  • Welcome bonus

    $ 200 cash back after spending $ 500 on purchases in the first 3 months after opening the account

  • Annual subscription

  • Intro APR

    0% for the first 15 months on purchases

  • Regular APR

    14.99% to 23.74% variable on purchases and balance transfers

  • Balance transfer fees

    Either $ 5 or 5% of the amount of each transfer, whichever is greater

  • Foreign transaction fees

    3% of each transaction in US dollars

  • Credit needed

Finally, if your spending is more concentrated in a few areas, you can opt for a card with rotating categories or higher reward rates in those categories.

The Chase Freedom Flex℠ offers 5% cash back up to $ 1,500 in combined purchases in bonus categories each quarter you activate (then 1%) (see full 5% cash back schedule here ), 5% cash back on travel booked through Chase Ultimate Rewards®, 3% cash back on meals and at drugstores, and 1% cash back on all other purchases. The Chase Freedom Flex also offers the same grocery convenience as the Unlimited.

Chase Freedom Flex℠

  • Awards

    Get 5% cash back on grocery purchases (excluding Target® or Walmart® purchases) up to $ 12,000 spent in the first year, 5% cash back on up to $ 1,500 d ” combined purchases in bonus categories each quarter you activate (then 1%), 5% discount on travel booked through Chase Ultimate Rewards®, 3% discount on meals and at pharmacies, 1% discount on all other purchases

  • Welcome bonus

    $ 200 cash back after spending $ 500 on purchases in the first three months after opening the account

  • Annual subscription

  • Intro APR

    0% for the first 15 months on purchases

  • Regular APR

    14.99% to 23.74% variable

  • Balance transfer fees

    Either $ 5 or 5% of the amount of each transfer, whichever is greater

  • Foreign transaction fees

  • Credit needed

If you are a foodie who regularly attends concerts or events, you can opt for the Capital One SavorOne Cash Rewards credit card. You’ll get 3% cash back on meals and entertainment, 3% on qualifying streaming services, 3% at grocery stores, and 1% on all other purchases.

Capital One SavourOne Cash Rewards Credit Card

Capital One® SavorOne® Cash Rewards credit card information was independently collected by Select and was not reviewed or provided by the card issuer prior to posting.

  • Awards

    3% cash back on meals and entertainment, 3% on qualifying streaming services, 3% at grocery stores and 1% on all other purchases

  • Welcome bonus

    Earn a one-time $ 200 cash bonus after spending $ 500 on purchases within 3 months of opening the account

  • Annual subscription

  • Intro APR

    0% introductory APR for the first 15 months of opening your account

  • Regular APR

    15.49% to 25.49% variable

  • Balance transfer fees

    3% for APR promotional offers; none for balances transferred to the regular APR

  • Foreign transaction fees

  • Credit needed

At the end of the line

Switching from your first credit card can open up a lot of opportunities for cardholders: you’ll likely be eligible for a card with a more generous welcome bonus and better rewards if you’ve been diligent in making your card payments at home. on time and as soon as possible. full with your departure card.

For pricing and fees for the Discover it® Secure Credit Card, click here

Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.

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