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A12 BUSINESS
Thursday 27 OcTOber 2022
8 times you’re using the wrong

credit card

By JAE BRATTON of Nerd-
Wallet
There’s no such thing as a
universal best credit card.
The right card for you de-
pends on your lifestyle,
your goals and your cred-
it history. For instance, if
you’re looking for travel In this Jan. 31, 2018, photo, an assortment of credit cards and
rewards but your friend is rewards cards are shown in Zelienople, Pa.
building credit, the best Associated Press
card for each of you will
differ greatly. come bonus but usually 4. YOU DIDN’T REALIZE 5%
And while there may not with a caveat: You have to CARDS TAKE EXTRA WORK
be one best card for you spend a minimum amount Several cards boast a top
the average American within a specific time frame 5% cash-back rate in pop-
has about three cards, ac- to get it. Note the spend- ular spending categories
cording to a 2021 Experian ing requirements for a like grocery stores, restau-
study there are many times card’s sign-up bonus, and rants and gas. The catch,
a card can be wrong for a use the new credit card though, is that you’ll have
specific situation. enough by the deadline. to do some work to earn
Here are eight times you If you continue to pay with that rate. In most cases,
could be using the wrong an older credit card that’s you’ll need to track cat-
credit card, and what you already in your wallet, you egories: Qualifying 5% pur-
can do instead. risk missing out on the bo- chases may rotate quar-
1. YOU’RE STILL USING YOUR nus if you don’t spend terly, or you may have to
STARTER CREDIT CARD enough on your new card. choose your own catego-
You may have started out A little planning can help. ries. If you’re spending out-
by building your credit with Think about upcoming big side of those categories
a secured card, student purchases you need to with this card, you’ll likely
card or alternative card, make, such as a car repair earn a paltry 1% instead
but once your credit is in or a new laptop. Just one of the juicy 5% you think
better shape, it may be of those could be enough you’re earning.
time to upgrade. to hit the bonus’s spending Most times, you’ll have to
If you’ve used a starter requirements. activate the bonus cat-
card responsibly by keep- 3. YOU’RE USING A STORE- egories before the issuer’s
ing your utilization rate low SPECIFIC CARD deadline to earn the 5%,
and paying balances in It’s true a store credit card even if you’re spending
full every month, you may can save you money, es- in the right category. Plus,
qualify for a card that’s a pecially if you are a fre- you’ll likely run into spend-
better fit now. A different quent, heavy spender at ing caps in those 5% bonus
card could offer a higher that store. However, the re- categories; once you hit
credit limit, better rewards wards earned with a store those caps, the rewards
earnings and perks like credit card are often only rate drops to 1%. For those
cellphone protection and redeemable at that store, who find a 5% card to be
travel benefits. Some card limiting their usefulness. high maintenance, opt for
issuers may automatically Most shoppers would be one that earns a flat 2%
upgrade your card once better off using a general cash back on every pur-
you’ve reached certain rewards credit card and chase instead.
thresholds, while others earning more flexible re- 5. YOU MIX UP THE CARD
may not. Contact the is- wards. Some cards have NAMES
suer to check your options. elevated rates for online According to a 2020 Nerd-
2. YOU’RE NOT USING A shopping purchases, while Wallet study, 14% of Ameri-
CARD ENOUGH TO EARN others earn as much as cans view credit cards
THE SIGN-UP BONUS 5% back at popular mer- as “complicated,” and
New cardholders can of- chants like Target, Walmart it’s not hard to see why.
ten earn a lucrative wel- and Amazon. Some issuers offer suites of
cards in the same family
and have names that are
nearly identical. The logos
of some issuers are strik-
ingly similar, too. Perform a
quick audit of your credit
cards to make sure that
they are the cards you in-
tended to get. Cards that
look and sound nearly the
same may be worlds apart
in terms of fees and re-
wards structure. q