3 reasons to switch credit cards this year

From changing banks to refinancing your home loan, it’s not uncommon to switch things up with your finances every now and then. Some common reasons Aussies choose to do this is the chance to save a few bucks or their current deal is no longer competitive. 

However, making a change with your personal finances can also help you work toward new financial goals. So, if you think it’s time you gave your plastic a refresh, here are three reasons you might want to rethink your current credit card. 

Reason #1 - The annual fee isn’t worth the perks anymore 

If you own a rewards credit card, you might have previously enjoyed the premium perks like earning and redeeming points, complimentary travel insurance or airport lounge access. But the thing with rewards credit cards is that they generally come with a luxurious price tag - aka the annual fee.

Depending on the type of rewards card, annual fees can reach up to an eye-watering $400! So whether the freebies no longer appeal to you or it’s been a while since you last used your points, downgrading your credit card could be a good idea. 

If you’re keen to make the switch, you might want to consider doing this now, as the COVID-19 travel restrictions could be another reason your rewards perks are collecting dust. 

Reason #2 - Your spending habits and money values have changed 

While it might have made sense to pick up a credit card stuffed with bells and whistles in the past, now you might prefer something simpler. This could be because you’ve got a new list of financial goals and your current plastic isn’t exactly going to help you reach them.

For instance, one new goal might be to save up for a home loan deposit or grow your emergency savings stash: a credit card with a high interest rate could be tempting you to spend, draining your savings when the bill arrives. 

In this case, you might want to consider switching to a no annual fee credit card for everyday spending or emergencies. 

Reason #3 - The introductory period is close to its end 

Many low rate or balance transfer cards may come with a flashy introductory rate, or ‘honeymoon rate’ of 0%, which expires after a certain period of time. If your honeymoon rate is coming to end, it might be worth shopping around on other offers, as cards like these generally have a high revert rate. This is the interest rate the card switches to once the introductory period ends. 

If you initially took out the card to take advantage of the interest-free spending, a low rate credit card may be the pick for you. You can compare different low rate options by using Mozo’s credit card comparison tool or get started by taking a look at the options below.