Five Points You Should Check Before Upgrading Your Credit Card

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A majority of people begin their credit journey by using simple credit cards. As they improve their credit score, they are able to apply for premium credit cards that have a greater credit limit. Some people are very quick when it comes to this process, while others take a long time. If you also have an ordinary credit card and are contemplating upgrading it, you have to keep many aspects in mind. Do not just accept a card upgrade that your card issuer offers you. It is best to think about all aspects and select the right card for you. Keep reading to discover the essential points to consider before upgrading your credit card.


There are many ways to improve your credit card

  • Increasing The Credit Limit:You can upgrade your credit card by requesting a credit limit increment for the card that you currently have.
  • Getting a more premium credit card:You can get offers to upgrade your basic credit card to a premium credit card, that not only comes with more credit limit, but also with better benefits and rewards.

Points to keep in mind prior to upgrading your Credit Card

Credit Limit

When you change your credit card most card issuers increase your credit limit. It is essential to ensure that your credit limit is enough to permit you to maintain the lowest (or excellent) credit utilization. You should only use 30% of the credit limit to keep your credit score high. This is impossible using a standard card with an uninspiring credit limit. As an example, if the credit limit was Rs. If your credit limit was. $50,000 and you utilized 30k per month, your credit utilization ratio would be 60%. This can negatively impact your credit score. It is important to ensure that your credit limit isn’t less than. This will enable you to increase your ratio of credit utilization to 30%.

Your spending habits

To make sure you pick the most appropriate credit card for you, it is important to be aware of the areas where you spend the most. If you are considering upgrading your credit card it is important to first analyze your spending habits and identify the categories where you are spending the most. After that, you should determine whether the card you’re upgrading to, provides benefits in that particular category or not. If you aren’t traveling often, it is not worth upgrading to a card that offers the best benefits for travel. If you enjoy going out to the mall or watching movies and want to make the switch to a card that provides the benefits of shopping and movies. If your existing card is most suitable for your needs There is no reason not to have it even if it’s a basic card. You can ask for a credit limit increase to benefit from the advantages of your existing card.

Reward and Special Offers

Before upgrading to a card, be sure to examine all benefits and rewards offered by that card. Check whether the offers and reward points will be beneficial for you or not. Some credit cards offer cashback and accelerated reward points in specific areas. It is important to ensure that you pick the most suitable credit card for your needs. Before making a final choice, make sure to look into all the deals and portals provided by the card issuer.

Fees & Charges

It is important to check the charges and fees before you upgrade your credit card. Don’t simply look at the annual fee and make your decision. It is better to look over the specific conditions and terms of the card you upgrade to, so that you don’t get surprised by any extra fees later on. Check for the interest charges as well as grace periods as well as cash advance fees, and so on. Also, before going for the card that has a high annual cost, consider whether paying that amount for a particular credit card is worth it or not. There are times when credit cards that have an annual fee that are low offer more exclusive benefits as compared to a credit card that has a higher cost. Therefore, you must be careful and prudent when making these decisions.

Hard Inquiries

If you apply to a premium credit card, the issuer will look over your credit report to determine your creditworthiness, and this credit report check is known as a hard inquiry. These inquiries could negatively impact your credit score in the short-term, but you can rebuild your score by making payments on time, utilizing less than 30 percent of your credit limits, and so on. So, it will be more beneficial to be prepared for a slight drop in your credit score. If your card issuer gives credit card upgrade options on their own and it doesn’t affect the credit score.

Bottom line

The upgrade of a credit card can be a good thing and can be beneficial for your financial situation in many ways, especially in lowering your credit utilization ratio. It is important to consider whether upgrading your credit card is necessary. If you think your current card is not adequate for you it is best to go for it, but if you feel like your existing card will suit you better than a more expensive card being provided to you, then stay clear of it. Before you update your credit card, keep these things in mind and make an informed decision. You can ask any questions in the comments section below if you have further questions.

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