How to switch credit cards

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There are many reasons you might be looking to trade in one of your credit cards for something better. Let’s say you applied for a rewards credit card a few years ago when you could only afford the no-annual-fee version, but now you’d like to upgrade to card with bigger and better rewards. Or you’re no longer making the most of that travel credit card and you’d like to try a cash-back card instead.

Well, turns out it’s both possible and easy to switch credit cards with your bank or credit card issuer. In many cases, you can upgrade or downgrade credit cards online.

Remember, a credit card switch is not the same thing as simply applying for a new credit card. Switching cards with your issuer is a good way to turn a card that isn’t working for you anymore into a card that offers the rewards, perks or fees you want. Just make sure to ask what will happen to your balance, points, age of credit and credit limit before you make the switch — as well as how those changes might affect your credit score.

How to change credit cards

Changing credit cards with your bank is relatively simple. Credit card issuers often send out targeted offers encouraging users to upgrade to a higher-reward credit card, and you can take advantage of those offers when they come your way — but you can also contact your bank or credit card issuer directly when you’re ready to make the change.

Decide what kind of card you want

Think about why you actually want to switch credit cards. Are you hoping to change from a cash back credit card to a travel rewards card, or are you interested in swapping to a card with no annual fee?

Understanding why you’re unhappy with your current credit card and asking yourself what you hope to get out of your new card will help you decide what kind of credit card you want — and whether you actually want to try to change credit cards with your card issuer, or whether you’d be just as happy opening a new credit card in addition to your current one.

Contact your card issuer

Once you’ve decided which card you want, it’s time to contact your bank or credit card issuer. Yes, you could just apply for a new credit card online, or check your credit card account to see if there are any card upgrade offers. However, contacting your credit card issuer over the phone is a good way to make sure you get all your questions answered before you switch — like what will happen to your current credit card rewards, whether you’ll be eligible for any sign-up bonuses or if the switch will include a hard pull on your credit.

Ask the right questions before you switch

Before you switch credit cards with your bank, make sure to ask the right questions. Here are some topics you might want to bring up during the conversation:

  • Will my credit limit be different after the switch?
  • What interest rate will I receive on the new card?
  • Will the switch involve a hard pull or credit inquiry?
  • What will happen to the rewards I’ve earned on my existing credit card? Will they transfer to the new card, or do I need to redeem my rewards before switching?
  • What about the balance on my current card? Will I need to pay it off in full before switching, or will it transfer to the new card?
  • Will I be eligible for any sign-up bonuses?

Remember, your bank or credit card issuer wants to keep you as a customer. This means that if you talk to them in person, they might be able to offer you bonuses or perks that wouldn’t be available if you applied online.

The answers you get from this conversation will also help you decide whether you really want to switch credit cards or whether you’d prefer to open a new credit card in addition to the card you already have.

Update your automatic payments

Once you get your new credit card, make sure to update any automatic payments that may still be linked to the old card. If you upgrade or downgrade your credit card with a bank or credit card issuer, your credit card number might stay the same — but your CVV (Card Verification Value) and expiration date will likely change, so be sure to update that information wherever necessary.

Things to know before switching credit cards

Before you make the switch from one credit card to another, make sure you’ve got a plan in place. You’ll want to consider how the switch might affect your credit score, what to do with any teaser interest rates you get offered and whether you’ll be able to transition your rewards from one card to another.

Understand how it might affect your credit score

Switching credit cards might not have any effect on your credit score — or it might have a bigger effect than you realize. Here are the ways in which a credit card switch could hurt or help your credit score:

  • Credit limit: If you are switching to a credit card with a higher credit limit, your credit score could go up. Why? Because 30 percent of your credit score comes from what’s called credit utilization: the amount of credit you’re using vs. the amount of credit available to you. With more credit available to you, your credit utilization should go down, boosting your credit score — as long as you don’t increase the revolving balance on your new card. That said, if your credit limit is lower on your new card then your utilization will be higher and you might see your score go down.
  • Age of credit: The length of your credit history accounts for 15 percent of your credit score. If you swap your oldest credit card for a new card, your credit history could decrease and your credit score could drop — but if your credit card issuer counts the two swapped cards as a single credit account, your age of credit will stay the same and won’t affect your credit score. (This is why it’s important to ask your credit card issuer the right questions before you switch cards.)
  • Credit inquiry: In some cases, a bank or credit card issuer will swap your credit card without doing a credit inquiry or “hard pull” on your credit. This is because they already know you’re unlikely to be a credit risk. In other cases, a credit inquiry is part of any credit application process, including a credit card swap — and that means you might see your credit score take a small dip, since 10 percent of your score is based on recent credit inquiries.

Plan for teaser interest rates

If you’re switching credit cards in order to take advantage of an introductory interest rate, make sure you have a plan for how to utilize that interest rate and pay off your balances before the higher APR kicks in.

If you’re switching to a balance transfer credit card, have a plan for which balances you’re going to transfer to the card and how you’ll make sure those balances get paid off during the introductory APR period. If you’re signing up for an zero percent introductory APR card to fund a big purchase like a vacation, make sure you’re prepared to pay off the cost of your purchase before the regular APR rate kicks in.

Know what will happen to your credit card rewards

If you’re upgrading or downgrading a credit card within the same rewards structure (going from a travel card with an annual fee to one with no fee, for example) you might be able to keep your rewards when you switch cards. If you’re switching between rewards structures (going from a cash back card to a travel card, for example), you’ll want to talk to your credit card issuer about what will happen to your current rewards.

In fact, it’s always a good idea to ask your bank or credit card issuer about your rewards before making the change. In some cases, you might lose your rewards during the process — especially if you haven’t had your current credit card long enough before switching. Make sure you understand exactly what will happen to your rewards before you agree to swap cards.

Remember: if you switch credit cards with the same bank or credit card issuer, you might not be eligible for the sign-up bonus on your new card. These bonuses are often reserved for new customers, not existing customers who switch cards. That said, your credit card issuer might be able to offer you a bonus to reward you for your loyalty — and if you get one, make sure you both earn and redeem your bonus rewards.