Credit card companies know that in today’s very competitive market, the only way to stay ahead of the competition, and win new business is to attract customers with great deals.
Nowadays customers have become a lot more savvy when it comes to financial products and most people will shop around before deciding on which deal to go for.
What do lenders do to draw us into the habit of changing our credit cards frequently?
Low balance transfer deals
Something that has become very popular amongst consumers is the credit card balance transfer. This is where the customer moves one credit card debt onto a new credit card with a very low, or even 0% interest period.
That way the customer saves money on their debt, and the lender hopes that either the odd purchase on the new credit card, or even a couple of months at the full interest rate will pay for the low rate promotional period the customer had.
What some customers do is keep switching credit cards, at the end of these low rate deals to secure what is in effect a long term loan at low or 0% interest. This is a popular tactic which can save you money if used correctly, and is a positive use of changing credit cards frequently.
These schemes that reward customers each time they spend money can also lead to people having more than one credit card. It is in our nature to try and stay ahead of the game, and secure ourselves the most competitive deals available, and this is what leads us to constantly swap and change our credit cards.
There some downsides to changing credit cards frequently, and that is the effect it can have on your credit rating. Having many different applications for credit over a fairly short period of time, can suggest to companies that you are a serial borrower, and can sometimes impact negatively on the way you are viewed.
If you have done a couple of credit card changes in the past, you should check to see if any of the old cards you had are still open. Even if you have not used a credit card for a while it may well be that the account is still open.
Having many open credit accounts active on your credit file may also not do you any favours, so you need to make sure any accounts you are not using are shut down.Back to top