According to a recent study, it was revealed that as many as 49 million Americans, that is over 40 percent of the population have either held the same credit card for over ten years or have never switched cards for a very long time. Many Americans still rely on the same credit card that they had taken while in college. The question is whether this is good or bad.
Is it necessary to switch credit cards
Convenience and a sense of familiarity are the two major reasons as to why most people tend to rely on the same card for years. In addition, if an individual happens to know all the benefits and rewards of their credit cards, have reasonable credit card terms, and a payment schedule that works for them, it is highly unlikely that the individual will be motivated to find another credit card.
Also, since using the same credit card for a long time gives a good boost to the credit score, most people don't really find the need to switch cards frequently.
For instance, a person who has been holding the same credit for about 15 years is likely to have a better credit history than a person who has been holding the same credit card for two years.
While keeping a credit card for longer periods has it's benefits, there are chances that such a person may be missing out on offers and rewards provided by another card. In all likelihood, a different credit card may even offer better credit terms but this goes unnoticed by most credit card holders according to reports.
Cash backs, rewards, and credit terms are the three factors that motivate people to stick to a certain credit card.
Although switching to a new credit may have benefits in certain situations, experts have said that it is not really necessary to throw out an old credit card.
Credit history plays an important role when it comes to taking loans and the longer a person uses a certain credit card, the better is his or her credit history.
On the other hand, old cards that are costing a person a lot of money in terms of payments are best if discarded. It is better to get a credit card that offers better payment terms and a more lenient spending limit.
Ultimately the question of whether retaining an old credit card is good or bad boils down to the benefits offered by different credit cards.