NEW YORK (MainStreet) — Once every year or so, it's a good idea to look at your portfolio. Not your portfolio of investments, but your portfolio of credit cards. The average American has 3.7 credit cards, but that doesn't mean those are the right credit cards for you. It's easier than ever to shop around for the best credit card for you. That means you can have 3.7 cards in your wallet working for you in the best way possible.
Shopping Around for Credit Cards
"In recent years, it's become a whole lot easier for people to engage the best credit card deals," says Randy Padawer, a consumer education specialist with LexingtonLaw. He notes that websites like Bankrate and Credit.com allow people the opportunity to see what the best deals are -- who has the best interest rates, the best rewards programs and the lowest annual feels. "It's so easy these days that you'd almost be negligent to not do your own research," he adds.
So once you find a great deal on a card, you're all set, right? Wrong. Padawer points out that, particularly with regard to rewards plans, things are in flux. This is also true of your spending habits. What was a great card for you last year isn't necessarily a great card for you this year. In fact, a recent report from Consumer World noted that this past summer alone, there were a "flurry" of notifications sent out alerting people to the fact that their rewards programs had changed -- often for the worse. Lost benefits included concierge services, roadside travel assistance, lost luggage insurance and other benefits people have come to take for granted with their card.
"It's all about looking at your own borrowing and spending patterns and matching that to the kinds of deals that are out there," says Padawer. He says that customers don't look at their own factors, instead responding to marketing and advertising. "When you do that, you end up with a really nifty card that doesn't really align with who you are and how you spend," he says. It's worth pulling out your monthly credit card and bank statements and seeing where you actually spend money during this process.
Examining Your Benefits
Gerri Detweiler, the director of education with Credit.com, notes that there are some common ways to go about examining the benefits you're receiving. "If you're traveling a lot and paying foreign transaction fees, you're paying fees that you shouldn't," she says. "You need a card that doesn't charge those fees."
The fees are always a good way to start evaluating your cards. For example, you might have a card with a high annual fee, but you're not getting anything in exchange for the fee. For example, you might have a travel card you're paying dearly for, but you never travel. There's no reason to keep the card.
The other side of this coin is the card that's not costing you anything, but that you're just not using anymore. "Let's say you're using an airline miles card, but travel isn't an option for you right now," she says. "You're not even checking your balances, let alone cashing them in." In this case, Detweiler recommends that you look into a cash back card. That's something anyone can use.
Playing the Field
Before you pull the trigger on anything, you still need to do more research. Padawer says that there's more to picking a new card than just numbers. "You want to use your favorite search engine to see what other consumers are saying about these credit companies," he says. Part of that is going to be looking at how easy the rewards programs are to navigate. But the other part is customer service.
The good news is that this entire process is so much easier than it used to be. "Years ago we were all at the mercy of local bankers to tell us what was out there," says Padawer. "That meant everyone was held hostage to the status quo."
And don't be afraid as many are: closing a credit card here or there isn'tgoing to affect your credit in a significant way. And if pulling out the scissors means you'll get more benefits with a new card more tailored to your lifestyle, all the better.