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5 questions to ask yourself if you're unsure about applying for a new credit card

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If your credit card no longer suits your needs, it may be time to apply for a new one.

To decide whether you've outgrown your current card, there are a few different things to consider. Below, CNBC Select walks you through the questions to ask yourself before pulling the trigger on a new card.

1. Are you earning rewards in the right categories?

Because different credit cards offer different rewards based on the spending category, it's smart to consider where most of your money is actually going.

For instance, if you regularly dine out, you may want to consider getting the *Capital One Savor Cash Rewards Credit Card, which offers 4% cash-back on dining. Or, if you are big on cooking, the Blue Cash Preferred® Card from American Express earns users 6% back on up to $6,000 spent per year at U.S. supermarkets (then 1%). Terms apply. (See rates and fees.)

Some credit card issuers have tools that can help you decide if the card you're considering makes sense for your lifestyle. For example, the TD Cash Credit Card, which offers 2% cash back at grocery stores and 3% cash back on dining, has a calculator that estimates how much you could earn annually based on your monthly spending on dining, groceries, travel, and other purchases.

2. Are you paying high interest?

The best way to get the most of your credit card is to pay your bill on time and in full each month. But if that's not possible, you don't want to be stuck paying high interest rates on the money you owe. If you've got a card with a big balance and a steep interest rate, you might want to consider doing a balance transfer to a credit card with a 0% intro APR.

The Wells Fargo Reflect® Card (see rates and fees) offers 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers (then 18.24%, 24.74%, or 29.99% variable APR thereafter;). Balance transfers made within 120 days from account opening qualify for the introductory rate, BT fee of 5%, min $5. (Read more about how balance transfer cards work.)

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3. Does the annual fee outweigh the benefits?

It's tempting to sign up for a card with a high annual fee because they often come with a lot of cool perks, like statement credits, access to upgrades and big welcome bonuses. But before you shell over money for a card, you want to make sure you can afford the fee and will use the card enough that it's worth the cost.

For instance, let's say you frequently travel and are looking at travel credit cards. These cards can have annual fees upwards of $550, but often provide numerous statement credits and perks that help offset the steep fee.

The Chase Sapphire Reserve® comes with a $550 annual fee, but offers a $300 annual travel credit and access to over 1,000 lounges with Priority Pass Select membership (valued at approximately $429). Those perks effectively add up to over a $729 value and don't include a credit for a Global Entry ($100) or TSA PreCheck ($85) application (every four years).

4. Do you have a big purchase coming up?

If you plan on taking on a large expense, such as a major appliance or the cost of a medical procedure, it can be a good idea to put that charge on a card offering no interest on new purchases for six to 18 months. These cards allow you to pay off the debt over time without incurring interest fees — just make sure you pay off your balance in full by the end of the intro period.

One option for financing a big purchase is the Capital One Quicksilver Cash Rewards Credit Card. This card offers 0% intro APR for the first 15 months on purchases (then 19.99% - 29.99% variable APR). Plus, you earn 1.5% cash back on every purchase.

Find the best credit card for you by reviewing offers in our credit card marketplace or get personalized offers via CardMatch™.

5. Have you applied for a card in the last six months?

If you apply for credit cards too frequently, card issuers may see this as a red flag and a potential indicator that you may not be a responsible cardholder. However, if you want to shop around for the best credit card offers, consider pre-qualification forms.

Most card issuers offer pre-qualification, which allows you to check your qualification chances without hurting your credit score. Simply fill in some information and receive an answer to whether you may qualify, with no damage to your credit score. Just know, pre-qualification is not a guarantee of approval and when you submit a formal credit card application your credit will be pulled, which dings your score.

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For rates and fees of the Blue Cash Preferred® Card from American Express, please click here.

*Information about the Capital One Savor Cash Rewards Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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