- January 7, 2022
- Posted by General Electric Credit Union
- 5 read
New Year, New Credit Card – New Opportunities!
Welcome to 2022! The best resolutions benefit you long after the ball drops. A simple one to consider is opening another credit card. If you’ve been playing around with the idea of doing so, below are a few indications it’s the right move for you. When used wisely, credit cards can play an important role in your financial success throughout the year.
Signs it’s time for a new credit card
1. You only have one
Did you know opening another credit card could actually improve your credit score? By increasing your overall credit limit, you can improve your credit utilization rate – the amount of credit available to you vs. what you’re actually using. Lenders like to see a rate of under 30%. Anything higher will affect your creditworthiness, as it indicates you’re too dependent on credit.
Say you owe $500 on a credit card with a limit of $1,000. This would make your credit utilization rate 50% – much higher than the rule of thumb. By opening a second card with a limit of $5,000, you’ll owe $500 across a total credit limit of $6,000. As a result, your utilization rate would drop to around 8%.
Consider opening a second credit card a few months before making a big purchase, such as a home or car. Applying for credit will trigger a hard inquiry, which temporarily lowers your credit score. In time, you’ll reap the credit-boosting benefits and look more attractive to lenders. They’ll see you’re not dependent on credit and that you can responsibly manage multiple cards at once.
- Tip: Learn more about credit utilization rate in General Electric Credit Union’s (GECU) FREE downloadable eBook, The Ultimate Beginner’s Guide to Credit.
2. You want to diversify
Every credit card comes with unique perks, such as:
- Cash back
- Travel perks
- Rewards points
- Bonus categories
In sports, each position serves a different role. A pitcher is meant to throw the ball to the catcher – not catch fly balls all the way back in left field. In the same way, each credit card in your wallet benefits you uniquely. You’ll rarely find an option that offers both cash back and rewards points.
Instead, consider putting together a team of cards that cover all the bases you care about. This way, you can make everyday purchases work in your favor. Use a cash back credit card to earn 2% cash back at U.S. supermarkets and wholesale clubs, then reach for a travel credit card for special event perks and access to a Luxury Hotel Collection.
3. You need a better rate
Many lenders offer a promotional annual percentage rate (APR) for balance transfers. While temporary, you could enjoy as low as 0% APR for 12 months. This means that, during the promotional period, you won’t be charged interest if you make the minimum payment due and carry over a balance month to month.
Ensure you continue benefiting from a balance transfer after the promotional period ends by choosing a card with a low APR. Because of their not-for-profit status, financial institutions like GECU are able to offer members low rates on rewards-rich cards.
Why choose GECU
In addition to low rates, GECU has cards that fit your lifestyle. Get premium travel perks with Visa Signature®,1 cash back with our Gold Card,2 or no-frills access to funds with The Classic.3 The best part? Your rewards never expire and there are no caps. If you ever need assistance, our team is available 24/7 to help and provide cardholder information.
Included with all GECU credit cards: