Thinking about getting a new credit card to add to your collection? That can be a smart move if the card has a better interest rate or rewards program than your other cards.
On the other hand, applying for a new credit card when you’ve got a history of poor money management – and maybe even a massive amount of debt to show for it – can add a whole new level of money problems to your life.
Below are six signs that you don’t need another new credit card just yet.
1. You already owe a ton of credit card debt
If most of your credit cards are maxed out and you already owe thousands of dollars in credit card debt, the last thing you need is a new credit card to add to your financial troubles. There is one exception to this rule, however. You may be able to transfer credit card balances to a new card with a 0% APR introductory offer for 18 months.
That way, you can pay the debt down without paying interest. Be careful, though. If you’re already out of control with credit card spending, you may just add to your debt with new purchases.
Find out: The Best Balance-Transfer Credit Cards
2. You have a pattern of amassing debt
If you’ve racked up credit card debt over and over – maybe paying it off eventually, or even getting bailed out by your parents or someone else – you have a serious problem you need to address. Close the window on that credit card application and meet with a counselor at a nonprofit credit counseling agency instead.
The credit counselor can assess your situation and help you set up a budget and payment plan. While you’re at it, consider seeing a therapist to get to the root of why you keep putting yourself in a bad situation financially.
Find out: What Is Credit Counseling and How Does it Work?
3. You like to gamble
Love to hit the casinos and gamble the night away? Not only should you not apply for a new credit card, you probably shouldn’t have a credit card at all. It’s just too easy to get costly cash advances from the nearest ATM when you’ve used up your cash and just need to keep feeding that slot machine you’ve been on for hours to hit the big jackpot.
Find out: 10 Activities That Waste Your Time and What to Do Instead
4. You have poor money management skills
If you don’t have a budget or pay attention to how much you spend, how much you owe and how you’ll pay off the debt you already have, hold off on getting a new card until you learn to manage money better.
A nonprofit credit counselor can help, and you can also learn money management skills online by reading articles on credible personal finance sites.
Find out: 20 Smart Personal Budgeting Tips
5. You buy lots of things you never use
Are your closets stuffed with clothing you never wore, tags still attached? Do you have a stack of Amazon boxes and merchandise still in the packaging that you bought on a whim? If so, you probably already have a scary amount of credit card debt, and another credit card with a fresh zero balance will just set you off on amassing more debt from unnecessary purchases.
Find out: 7 Hacks to Help You Stop Impulse Spending
6. You can afford to make only minimum payments
If you already have a lot of credit card debt, it can be difficult – or even impossible – to pay off the statement balance each month to avoid paying interest. And if you owe thousands on credit cards, you may only be able to afford the minimum payment on each card. But if you’re making only minimum payments, it will take years to pay off the debt, and you’ll pay hundreds, or thousands, of dollars in interest over time.
Curious about how much you will pay if you make only the minimum payment? Input your credit card balance, interest rate and minimum payment amount on a credit card interest calculator to shock yourself into putting your credit cards away until you pay off high balances.
Your credit card statement will also contain a disclosure showing the total of how much you will pay and how many years it will take to pay off the balance by making only the minimum payment.
