en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en tr en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en en
That means using your credit card like a debit card, not like a free flowing spigot of money.  There are too many benefits to using a credit card like a free month of float on your money and free warranty extensions on products you buy to ignore credit cards completely.
That isn’t to say that credit cards are risk-free.
Obviously, many people get trapped in credit card debt paying high interest rates with balances that take forever to pay off.  (Many times this is through their own choices of spending too much money on the card, but I digress.)
Just like any other tool credit cards can be used for both good and bad.
The choice on which is up to you.
Even if you aren’t up to your eyeballs in credit card debt there are times when it is just time to move on and decide this isn’t a good card for you.
3 Big Reasons to Break Up With Your Credit Card and Find a New Card
Here are a few reasons you might decide to bail on your current credit card and move on to a new one.
Here are some of the fees your current credit card may be abusing you with:
Paying an annual fee can make sense if you use the card all of the time and need the specific benefit the card provides.
But if you’re looking to drop a card then you aren’t getting the value from the card that is provided for paying for the annual fee.  There’s no need to give a company $50 to $100 for benefits you will never use.
If you can’t keep up with your payments you will end up paying late fees to the credit card company.  Those late fees will drive up your interest rates and cost you money you can’t afford to lose.  If you’re getting hit with a lot of these fees, cancel the card, cut it up, pay it off, and find a new credit card (if you can manage your use of it better).
Don’t let a credit card that isn’t benefitting you clutter up your wallet.
Here’s one you may not have thought of.
Some cards add a surcharge for using your card overseas.  This fee can be upwards of 3% added to the cost of the purchase you are making.  There are other cards that will not hit you with these unnecessary fees.  If you plan on traveling overseas, even for just a one or two week vacation, getting a card that won’t add 3% to the cost of your vacation is a smart move.
Related: Take a look at some great travel rewards credit cards.
Naturally, if you have had a late payment then the credit card company has jacked your interest rate way up.
You can’t just walk away from the credit card with a balance, but you can stop using the account, and use a 0% balance transfer offer to pay off the card before canceling it.  Then make sure you pay off the balance on the balance transfer card before looking for a new rewards card.
Rewards Plan Doesn’t Fit Your Lifestyle
Lastly, the rewards plan you get with your credit card may simply not fit with your lifestyle any longer.
Maybe you signed up for an airline rewards card, got a lot of bonus points, used it for a while, but now don’t plan to fly as much.  There’s no sense in staying tied to an airline rewards program which is heavily dependent on you spending with the airline to get rewards.  If you aren’t going to be flying then drop the airline card and pick up a new credit card that rewards you better for categories that make sense for your current lifestyle.
You Aren’t Dating, This is Business
For some reason there is a subset of credit card users that believe in deep loyalty to their credit card company.  Maybe it is because they’ve had a great customer service experience or they are afraid canceling a card they’ve had a long time will impact their credit score.
But lets be absolutely clear: if this is a relationship, it isn’t a dating one. It’s business.
And sometimes in business it is time to just cut things off and agree to move on.  Don’t maintain loyalty to a specific card that isn’t benefiting you, especially if you are paying an annual fee.
Drop the card and find another one — perhaps with the same company you’ve got loyalty to.
Life is too short to be in a bad relationship, and your relationship with a credit card is no different.
If your cards aren’t a fit for your current life, either cancel them and move on, or at the very least freeze them or cut them up, and find a replacement.  You might want to keep an older card open, unused, to protect your credit history.
When do you think it’s time to break up with your credit card?
Filed Under: Credit Cards
Kevin Mulligan is a debt reduction champion with a passion for teaching people how to budget and stay out of debt. He's building a personal finance freelance writing career and has written for RothIRA.com, Discover Bank, ING Direct, and many others.
January 28, 2013 at 8:07 pm
Hey Kevin, good tips here. My wife and I have a credit card and use it for Airline rewards. However, we do a lot of spending with our Perkstreet rewards card too. The problem I see with our approach is somewhat related to the annual fee issue you mention. My feeling lately is that we should be all in or get out. We pay $80 (and I know I could find something cheaper) for an airline miles card. While we do earn quite a bit per year, I often think we’re not maximizing our return or even getting enough benefit to offset the $80. Anyway, I’ve thought about switching to just using the credit card to maximize our return. And of course, we would be spending according to our budget. What are your thoughts?
January 28, 2013 at 11:09 pm
Which rewards are more valuable to you? Cash back is great but if you fly often enough to justify the airline miles card then that may be a better deal for you. And don’t just look at the airline miles, there are probably other benefits the card gives you as well.
Another option is looking into a travel rewards or airline miles card that doesn’t have an annual fee but can still earn you miles for the airline you use.
Of course peace of mind knowing you aren’t putting too much on a credit card has value as well but that all depends on your own spending habits.
January 29, 2013 at 9:20 pm
Glen, thanks for your thoughts. I’d like to use the airline miles for a family vaca once per year and will definitely follow your tip on shopping for a no fee airline mileage reward card. Peace of mind is another matter. It makes me a bit nervous using a CC for all spending but as I said, we’ll follow our budget. I’ve always said that it doesn’t matter what you use to spend as long as you are diligent about sticking to your plan.
Gen X Finance says
January 29, 2013 at 12:55 am
Credit cards are really not helping you save at all. Yeah sure they help you in some situations but is it really worth it? Although you are telling yourself that you will only use it for emergency situations, at the back of your head, you know that it’s making you buy impulsively.
January 30, 2013 at 4:42 am
Nice article, Kevin. I’m actually haven’t used a credit card in 2 years and I have to say it’s much better this way. I only spend what I have and nothing more. My advice for people is to go with debit cards.
January 31, 2013 at 12:58 pm
The WIfe and I just made the decision to break up with AMEX. We used our 100K+ miles for a flight and now don’t know why we would continue to pay $175/yr for the annual fee.
A Little About Me
I'm Glen Craig - I used to live paycheck-to-paycheck, drowning in credit card debt. I turned that all around and now I build wealth rather than debt.
My goal is to make personal finance easy for you.
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