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To switch issuers, or not to switch?

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Having more than one credit card with the same issuer has some advantages. Account management is easier when you can do everything in one banking system, and you can more easily transfer rewards and balances between accounts. But maybe the rewards and perks of another card seem more appealing to you than any of the cards your current card issuer offers.

So, when you want a different card, are you better off sticking with your current credit card issuer or switching to a different issuer? The better option depends on your personal circumstances.

Stick with your current issuer

There are a couple reasons you might want to stick with your current card company. For one, you’re a known quantity, so you’re probably already getting card offers from that issuer. If you have a card from Capital One and paid your bills on time, for example, you’ve created a level of trust. Now the company may want to extend you another account — or make the account you have more appealing.

Here are your options if you stay with the same issuer:

Swap your credit card for a different one with the same issuer

Review the array of products that are currently available from your credit card issuer. It may offer a credit card with features that are much more attractive than when you first got the card. If it does, you may be able to switch your credit card for the one that better suits you.

For example, maybe you started out with a Chase Freedom® Student credit card when you were in college, but it doesn’t come with the travel-related benefits you want now. The Chase Sapphire Preferred® Card does, so you can request a switch.

This is also known as a product change and it can be a great way to get what you want, including lower annual fees, more appropriate rewards and perks or a lower APR.

After you’ve identified the more compelling card, call the customer service number and ask if you can trade in your existing card for the one you want. Be sure to ask if it will add a hard inquiry to your file, though. Hard inquiries can temporarily lower your credit scores, so it’s best to be prepared.

Unfortunately, in most cases, you will not get the benefits associated with new account holders — such as a sign-up bonus or 0 percent intro APR — when you switch products.

Keep your current credit card but upgrade the terms

Instead of switching accounts with the same issuer, an alternative method is to have your original credit card upgraded. Call your issuer and ask if you can change the terms of your account.

For example, maybe the card you have is developed for people with bad or no credit, and the APR is high and the limit low. If you’ve treated the account well, you may ask for the APR to be lowered and the credit limit raised. If you have a secured credit card, find out if you can get your deposit back, which will transform the card into an unsecured account.

The good news is that upgrading a card can prevent a hard inquiry from being placed on your file. The only exception could be if you ask for a higher credit line, since issuers typically check your credit to see if you are eligible.

Get a new card from the same issuer

There are a number of advantages to having multiple cards with the same issuer, including:

  • Credit pre-approval. When you use one account responsibly, the issuer may be confident that you can do so again with a second credit card. Therefore, you may receive a pre-approval offer for a card with a better rewards program than the one you have now.
  • Convenience. Having all of your credit card accounts with the same issuer can make your life easier. Account management would be streamlined, so you would just have to visit one website or app to monitor activity and pay bills.
  • Maximum rewards. You can often access complementary rewards and benefits by holding a combination of cards from the same issuer, often with a business card in the mix. The Chase trifecta and the Amex trifecta are examples of this strategy.
  • Greater borrowing opportunities. When you have several well-managed credit cards with the same issuer, you increase your value as a customer. That can put you in a great position when applying for other products offered by the same institution, such as mortgages and car loans.
  • Extra help when needed. With a long background of handling multiple credit cards responsibly, the issuer may be more open to giving you a break should you ever get into financial trouble and request assistance.

Switch to a new card issuer

Of course, you don’t have to stick with the same issuer you have now. There are plenty of good reasons to sign up for a card from a different bank:

  • The right rewards. You may find the rewards program that you want isn’t available through your current issuer. Every major credit card company has a slate of credit products from which to choose, so look for the rewards available from different issuers.
  • A generous sign-up bonus. One of the best perks of signing up for a credit card is the sign-up bonus — and maybe you’ve spotted an offer from another issue that looks too good to pass up. The best sign-up bonuses can be worth hundreds (or thousands) of dollars with the right redemption option. Just be sure the card itself fits your needs.
  • Store loyalty program. When you make purchases at stores with a general purpose credit card, you won’t get the discounts and deals that are available from a store credit card that is associated with a particular retailer. If you want to lower your shopping costs at a place you frequent often, a new retail card may be in order.
  • Flexible travel benefits. The card you have may be co-branded with a specific airlines or hotel brand, but now you want maximum flexibility when traveling. For example, you may have an American Airlines credit card, which is issued either by Citi or Barclays, but you’d like to fly more with Delta. American Express offers Delta Airlines credit cards, so to take full advantage of this airline’s benefits, you might consider an Amex card.

Protect your credit as you add new cards

No matter where you get additional credit cards, you can preserve your credit scores with the right approach. Apply only for credit cards that are within your score range. Some are designed for people with particularly high scores, so check the requirements before submitting an application. This way you can avoid being rejected, which will add an unnecessary hard inquiry to your file.

Your credit scores may dip a little when you obtain a new credit card because it will shorten the length of your credit history. However, the negative effect will be short-lived if you keep the card and use it responsibly.

A new credit card can also boost your score by providing you with more overall available credit, thus lowering your credit utilization ratio. This credit scoring factor accounts for 30 percent of your FICO score, second only to payment history at 35%.

If managing accounts from different issuers gets complicated, take steps to streamline your account management. Download the issuers’ apps to your phone and other mobile devices so you can check transactions wherever you go and in real time. Set up automatic bill pay so you never miss a payment.

The bottom line

There is no reason to only do business with a single credit card issuer, but if you want to stick with them, ensure that the relationship is always positive. When it is, your options for different cards with that issuer will remain open. And since your responsible card use will be reflected on your credit report, the wide world of credit from other issuers will be available, too.

Written by
Erica Sandberg
Credit And Money Management Expert Contributor
Erica Sandberg is a credit and money management expert who began her career at Consumer Credit Counseling Service (CCCS). There, she helped individuals and families overcome their debt issues and developed budgets, then transitioned into the agency’s primary media spokesperson.
Edited by
Senior Editor