Consider the grade you have around midterms. If the grade is in danger of lowering your grade point average, or if you feel you could achieve a better grade at a later date, it may be helpful to drop the course. This is particularly true if you are required to achieve a certain grade in that class as per the requirements of your major.
If you are too spread thin and can't devote the time and energy needed for the class, it may be best to drop it. If you are working a side job to pay your tuition or if you have taken on too many classes at once, dropping a course can relieve some of the pressure.
Some classes are only necessary for certain majors. If you have decided to change your major, it may no longer be necessary to take a course you enrolled in particularly for the old major. For instance, a pre-med student may not need to take a British literature class.
If your finances have been spread too thin, it may help to drop a course and save the tuition costs for a later time when you may be better able to afford it. Be careful, as some universities will not refund an initial payment after a course has been dropped. Check with your registrar's office to make sure.