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Why it took me 5 years before finally deciding to open a new credit card

I went from having mixed feelings about credit cards to finally feeling ready for a new one.

Paul Bradbury | Getty Images

When I was a junior in college, my dad told me something that would change the trajectory of my finances for many years to come. He said it was time for me to apply for my own credit card. I had only previously been an authorized user on one of his credit cards so I could build my credit and learn when I should and shouldn't use a credit card.

I had mixed feelings about the idea of opening my own credit card. On the one hand, it felt like some kind of a rite of passage into adulthood. I wouldn't have to ask my parents if it was okay to charge something to credit now.

And clearly, my parents must've thought I was responsible enough to make my own purchasing decisions if they were encouraging me to get my own card. At the same time, though, making my own payments and understanding potential interest charges seemed daunting, and I was also really afraid of credit card debt.

But squandering the opportunity to finally feel like a real adult didn't seem ideal either, so I applied for the TD Cash Credit Card and was approved soon after. The card doesn't have an annual fee (something that was attractive to me at the time since I was a total credit card newbie) and earns 1%—3% cash back on purchases. I didn't really care about rewards at the time, but it was a nice benefit to have.

However, my biggest reason for going with this credit card was because I was already a TD Bank customer, so managing a credit card through them seemed easier. And it was; I just kept the credit card linked to their mobile app so I could pay my bill, check my balance and have all my finances grouped in one place.

So for the last five years, the TD Cash Credit Card was the only card I actually used. And while I took comfort in the simplicity of only having one credit card to manage, I feel ready to branch out and add a second card to my very small collection.

The decision didn't happen overnight. I've learned a lot about my spending habits, personal finance and credit cards over the last few years. That knowledge has not only helped me decide it was time for a new credit card, but it also helped me understand what the best cards for me were.

But here's what made me wait so long in the first place:

I didn't feel totally confident with credit card management

I understood the gist of how credit cards work but I didn't think I could manage more than one card at a time. I found myself making large purchases but only paying off a portion of my bill each month. This meant that I was accruing interest on my balance, and I didn't want the same thing to happen with a second credit card. I had a feeling that the larger the balance, the more stressful and difficult it would be to pay everything off. Because of this, it seemed stressful to have to make multiple monthly payments to multiple credit cards.

So, I started being more intentional about how I spent my money. I waited three days before pulling the trigger on larger purchases to make sure I still wanted to buy them—more often than not, I ended up not spending the money. This allowed me to pay down my credit card balance faster.

Last year was the first time that I had ever paid off my credit card balance in full. Now that I know what I can do to avoid letting my balance get too high, I know it'll be easier for me to pay everything off.

Credit card interest rates can get pretty high compared to the rates for student loans or personal loans —they typically range from 15.56% to 22.87%. Because of this, it's important to pay off your credit card on time and in full each month. Carrying a balance means that you'll be charged interest, which will only add to what you owe. Plus, paying off your credit card debt can improve your credit score by lowering your amount of credit card debt in relation to your total credit limit.

But if you're worried that you won't be able to pay off your bill in full, you might consider a credit card that offers a zero-interest period to help you get started. The Citi Simplicity® Card, for example, lets you make purchases and balance transfers interest-free. The 0% intro interest period on balance transfers is for the first 21 months from date of first transfer and, for purchases, 0% interest for 12 months from date of account opening (after, 19.24% - 29.99% variable APR). Balance transfers must be completed within four months of account opening. There's an introductory balance transfer fee of 3% or $5, whichever is greater for transfers completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5). This way, you can work on building good credit habits without being bogged down by interest charges for the first year and a half.

I wanted cool perks but didn't know how to figure out if an annual fee was worth it

I have dreamed of the tantalizing perks of travel rewards credit cards or a really long time — the huge sign-up bonuses, the annual travel credits, luxury hotel perks and airport lounge access all sounded like a traveler's dream. But I also noticed that many of those cards carried hefty annual fees, and I wasn't sure I was ready to pay one.

There are a few things you can consider when deciding if paying an annual fee is worth it. But for me, I realized that comparing the value of the perks to the cost of the annual fee would make the most sense.

Because of this, I think the Chase Sapphire Preferred® Card would give me enough bang for my buck. The annual fee is only $95 and you'll receive 60,000 bonus points when you spend $4,000 on purchases within the first three months from account opening. Since those 60,000 bonus points are worth $750 in travel when you redeem through Chase Ultimate Rewards®, the card will basically pay for itself seven times over. Plus, I can downgrade to a no annual fee Chase Freedom Flex℠ or Chase Freedom Unlimited® if I don't want to pay the annual fee anymore.

And I won't have to worry about inflating my lifestyle or overspending in order to hit the $4,000 spend goal — I can pay my tuition with the credit card and just pay it off immediately.

Chase Sapphire Preferred® Card

On Chase's secure site
  • Rewards

    $50 annual Ultimate Rewards Hotel Credit, 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining, 3X points on select streaming services and online grocery purchases (excluding Target, Walmart and wholesale clubs), 2X points on all other travel purchases, and 1X points on all other purchases

  • Welcome bonus

    Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Ultimate Rewards®.

  • Annual fee


  • Intro APR


  • Regular APR

    21.49% - 28.49% variable on purchases and balance transfers

  • Balance transfer fee

    Either $5 or 5% of the amount of each transfer, whichever is greater

  • Foreign transaction fee


  • Credit needed


  • Terms apply.


I now have a better understanding of what credit card perks actually matter to me

Of course, getting perks from your credit card is nice and all, but it's important to make sure you'll actually use them — especially if you're paying an annual fee for them. By figuring out what perks were important to me (and which ones weren't), I was able to weed out some credit cards that I knew wouldn't be a fit for my lifestyle.

One perk I've come to really value is the ability to invest the cash-back rewards I earn. I didn't even know that this was something you could do, but thanks to the Fidelity® Rewards Visa Signature® Card, you can boost your retirement savings just by spending money on things you needed anyway. This card doesn't have an annual fee and I like the idea of using the cash back I earn to invest in my Roth IRA. In fact, one retiree used this strategy to earn extra spending money for retirement.

I learned how credit scores actually work

Being a financial journalist has helped me improve my knowledge of personal finance as a whole since I'm constantly seeking out new information (even in my free time) and interviewing experts. One of the most impactful things I've learned is how opening a new credit card actually impacts our credit scores.

Credit utilization accounts for 30% of your FICO score. You get a credit utilization rate by dividing how much of your credit you've already used by the total available credit. A lower utilization rate is generally a good sign to lenders that you tend toward healthier credit management habits.

Paying down your credit card balances is a good way to lower this utilization rate. But another long-term way to improve your utilization can be to open a new credit card. A new credit card increases your total available credit. And if you continue to keep your balances low after opening a new card, you'll keep your utilization rate even lower, too.

That's not to say that it's okay to open up credit cards left and right. Applying for a new credit card can temporarily lower your credit score because lenders will run a hard inquiry on your credit. But healthy credit management habits, like making on-time payments and avoiding overspending, can help you improve your credit score. Understanding this made me way more confident that I would set myself up to actually improve my credit score in the long-run.

Bottom line

The decision to open up a new credit card can be a deeply personal one. While there are many attractive offers out there, you should always take the time to consider whether or not you feel confident in your ability to manage another credit card.

Understanding your spending habits and how you'll use any of a card's perks can also play an important role in the decision. If you really aren't sure if opening a new credit card is the right choice for you, it always helps to speak to a financial advisor for input.

Information about the TD Cash Credit Card, Chase Freedom Flex℠, Fidelity® Rewards Visa Signature® 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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