40% of Americans Have Never Changed Their Primary Credit Card -- but Is That Good or Bad?

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Remember that first credit card you got straight out of college? You probably have memories of whipping it out to pay for the instant noodles you were forced to subsist on when your job was entry-level and your salary followed suit. But is that the same card you rely on steadily today? If your answer is yes, you're not alone. An estimated 49 million Americans have never switched from their favorite credit card to another, or have held the same primary card for over a decade, according to new data from CreditCards.com. But whether that's a positive thing is a different story.

When it pays to keep your old credit card

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Why do 40% of Americans hang onto the same credit card for the long haul? Often, it boils down to familiarity and convenience. If you know your card's rewards system inside and out, are used to its payment schedule, and have relatively good credit card terms, then you may not be motivated to seek out alternative cards.

Furthermore, using the same credit card over time can help you boost your credit score. Of the various factors that go into a credit score, the length of your credit history is an important one; if you've had the same credit card for, say, 15 years, that's a nod in your favor. Holding the same card for just two years, by contrast, is far less impressive.

Hanging onto a long-term credit card can also help with another key factor that goes into your credit score: Your credit utilization ratio represents the amount of available credit you're using at once, and ideally, it should be kept to 30% or below to help your score. Therefore, if your long-term credit card comes with a spending limit that's increased over the years, it could boost your score, provided you use it responsibly.

Are you missing out on a better offer?

Clearly, there are advantages to hanging onto the same credit card for years, but here's one negative to consider: By sticking with that card, you could be missing out on other offers with better rewards and more favorable terms.

Imagine your long-term credit card offers 1% cash back on all purchases: If there's another card out there offering 2% back, you could be losing out big time. Similarly, there could be a card out there with a far better interest rate than yours has. Now ideally, you should aim to pay off your credit card balance every month to avoid racking up interest. But if you run into a glitch and need to carry a balance, you're better off getting charged, say, 14% interest as opposed to 20%. In fact, CreditCards.com reports that rewards and interest rates are the biggest factors in getting consumers to sign up for new cards.

Should you keep that old credit card?

If you're happy with your long-term credit card and it doesn't charge an annual fee, then it pays to keep that account open and use it sparingly if you find a new card with better terms. Your credit score stands to benefit, for the reasons reviewed above.

That said, if there's a much better credit card out there and you're paying an annual fee for your current one, you might consider dumping that long-term card, especially if your new one comes with a generous spending limit. There are various things you can do to boost your credit score, the most important of which is being on time with your payments. So if you have an old card that's costing you money and doesn't have the best terms or rewards, there's no sense in having it take up valuable real estate in your wallet.

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