At least once a month, a friend or reader will message me asking for credit card advice. The story is always similar, they’ve had this or that credit card for years and they’ve come to the conclusion that it may not be the best fit for them anymore. This is great since they’ve realized it’s probably time to make a change, but interestingly enough, they also usually admit that it’s taken them too long to get to that point.

Changing credit cards is an easy task, but many people are hesitant to do so. They may be worried about how it’ll affect their credit score, what they’ll do with the points they’ve currently earned or even how they’ll pay their bills with the new card. It doesn’t matter what your reasons are, you should regularly look at your credit cards and decide if they still fit your lifestyle. Here are some situations when it’s time to upgrade your credit cards.

You’re no longer a student

Generally speaking, most people get their first credit card when they’re a student at college or university. Credit cards that are offered to students tend to be very basic. It’s likely a low rewards or cash-back credit card that doesn’t give you much in return. Don’t get me wrong, those cards are fine for students, but once you get a job and start spending more money, you’ll likely want to look at one of the best cash back credit cards in Canada since they’re much more lucrative. 

The points you’ve earned are useless

Useless is a bit of a strong word, but sometimes you may not be collecting the best points. My dad has been an AIR MILES collector for four decades and the only thing he has claimed is free car washes. What he should have done is switch to the BMO World Elite Mastercard since BMO is who he banks with and the new card would allow him to earn BMO Rewards points. The points he earned could be applied to travel, merchandise gift cards and even investments, but unfortunately, not free car washes. I

You want to reduce your debt

So far I’ve focused on earning rewards and cash back, but if you have any outstanding credit card debt, then you need to switch to one of the best low interest credit cards in Canada. What makes these cards appealing is that you’ll get a balance transfer option where you’ll pay 0%-1.99% interest for 6 months. Once that promotional period ends, your rate goes up to 8.99-12.99% which is still considerably lower than the 19.99%-30% interest rate that most credit cards charge. By using a low interest credit card, you can quickly reduce your debt, just don’t pick up any additional debt.

Your salary has increased

Visa Infinite cards require a personal income of $60,000 or a household income of $100,000 while World Elite Mastercards have a personal income of $80,000 or a household income of $150,000. Once you reach those thresholds, it could be worth getting a premium card since they offer you better benefits. For example, the Meridian Visa Infinite Cash Back Card gives you 4% cash back on gas and grocery purchases which is one of the highest earn rates available. Then there’s the PC Financial World Elite Mastercard that earns you 45 PC Optimum points per $1 spent at Shoppers Drugmart and 30 PC Optimum points per $1 spent where President’s Choice products are sold. This card is obviously great for people who shop at those merchants on a regular basis.

You have a specific goal in mind

Let’s say you want to travel, then getting one of the best travel rewards credit cards in Canada makes the most sense. You can take things a bit further by looking at what your goals are and then applying for a credit card that will help you reach those goals. Let’s assume you and your partner want to travel from Toronto to Los Angeles, if you applied for the American Express Platinum Card, you’d get 60,000 American Express Membership Rewards points as a welcome bonus when using a referral link. You could then transfer those points to Aeroplan at a 1:1 ratio which would give you enough points for two round-trip tickets to anywhere within Canada and the continental U.S. Alternatively, you could get the WestJet RBC World Elite Mastercard which comes with a companion voucher starting at $99. Each of those cards could save you $500+ on your trip.

You’ve hit a life event

When my wife and I got married, we decided to combine our finances. I was with RBC at the time, but I decided to switch to TD which is who my wife banked with. One of the reasons for switching is that TD had a better banking package which waived the annual fee for the TD Aeroplan Visa Infinite card. This ended up being my new daily credit card since we were trying to accumulate as many Aeroplan points as possible. When we were about to have our baby, we knew we were going to have a bunch of upcoming expenses so we looked at the best credit card deals and took advantage of some of the offers.

You’re a power spender

Finally, if you charge a lot of money to your credit card every month, it makes sense to make a switch. Business owners will want to look at a card such as the American Express Platinum Business card since it earns you 1.25 points for every $1 spent. Best of all, you can claim your points on any purchase you make. If you happen to spend a lot on say food and drinks, then check out the American Express Cobalt card that earns you 5 points for every $1 spent on groceries, restaurants, bars, cafe, and food delivery.