Almost every issuer will let you switch to a different credit card from the same bank without pulling your credit, but it may not be the card you want.
Switching to another card from the same issuer can seem like the perfect solution to a number of credit card dilemmas. By doing this, you can end up with better — or simpler — rewards, a higher credit line or a lower interest rate. One very practical reason cardholders switch is to trade a card with a looming annual fee for one with no annual fee.
In some cases, keeping the same issuer means no application and (even better) no credit check, which means no impact on your score.
Here are eight questions you need to look into before switching — plus the major issuers’ basic rules for switching cards.
Questions to ask yourself before switching cards
1. Will the issuer do a credit check?
One advantage to staying with the same issuer: avoiding a hard credit check. If you select a different card from your current card issuer, most companies won’t check your credit at all. Others will do a soft check, which won’t affect your score. But with some card switches (and some issuers), there will be a hard inquiry.
It didn’t come as a surprise to Bruce McClary that the issuer pulled his credit when he switched cards. “Because I was looking to change my credit limit,” says McClary, vice president of public relations for the National Foundation for Credit Counseling.
When you inquire with your issuer about changing cards, McClary says to ask for someone “closer to the underwriting process” to make sure that person knows the answer.
It’s also smart to skip switching cards if you’re less than a year away from a big purchase, like a house or a car. Depending on your score, a couple of points could mean the difference between hundreds or thousands of dollars in interest over the life of your loan.
2. Are there different rules for different cards?
Most card issuers will let you switch cards within the same card family without an application or credit check. But if you want to change into or out of one of the issuer’s co-branded cards, or if you decide to change card families, you might need to submit an application and undergo a credit check, just as if you’d never been a customer.
If your goal is to simplify paperwork or switch cards without a hard credit check, ask first which of the issuer’s cards (if any) will qualify.
3. Will I be eligible for a sign-up bonus?
You are not a new customer, technically. Therefore, the majority of card companies won’t offer you those welcome bonuses. However, some cards offer special bonus rewards as a perk to some cardholders who switch cards. It’s important to find out from your issuer if you qualify for any switching bonuses.
4. Is my credit score good enough?
You don’t want to switch to a new card if your credit and credit score are in less-than-stellar shape, as this could impact the APR you’ll receive on it. This is especially important if the company is doing a hard credit check.
If that’s the case, it might be worth it to wait until you’ve had time to raise your score. Many issuers will require your account to be in good standing as well. If you’re delinquent or about to have that balance sent to collections, a switch likely isn’t in the cards for you.
5. How will the old and new cards be reported to the credit bureaus?
The average age of your accounts and the length of your credit history are also important credit-scoring factors. A hint: Older is better. So, think twice before you swap out the oldest card in your wallet.
To understand how the switch might impact your credit, ask your issuer whether the new card will appear as a new “trade line” on your credit report and whether your credit history will list the account’s age as that of the new card or the old one. As long as the switch won’t affect the length of your credit history, you should be fine.
6. How will the swap affect my utilization ratio?
If the new card comes with a different credit limit, this could potentially benefit or hurt your credit as it will impact your credit utilization ratio.
Credit utilization — the amount you have borrowed compared to your credit limits — is the second most important factor in credit scoring calculations, after making on-time payments. Credit scoring formulas look at your utilization ratios on individual cards as well as the overall utilization of all your accounts combined.
If the new card you’ll receive after the switch comes with the same credit limit, your utilization will remain the same. If it comes with a higher limit, this will reduce your utilization and potentially boost your score. But if the credit limit is lower, your utilization will increase — and this could make your score drop.
7. What happens to existing rewards?
If you’ve spent five years collecting points to finance that big trip, you don’t want to lose them just because you’re switching cards on the eve of your journey. Check your rewards balance and include those points or miles in your conversation with the issuer. Find out if you might lose some or all of them if you switch, and what steps you can take to protect them.
8. Should I shop for other issuers?
It’s smart to shop all of your options before you change cards — especially if you have to reapply anyway or your current issuer is going to pull your credit.
Even if you can get the new card without a credit check or extra paperwork, “it’s still worth looking at what else is out there,” says McClary. “Look at some of the competitive offers from other lenders, too.”
How major card issuers handle card swaps
|Bank of America|
|Navy Federal Credit Union|
Switching to a new card from the same issuer might be beneficial if your current card isn’t meeting your needs. You may be able to switch to a card with better perks and benefits, or one with a higher rewards rate.
However, it’s important to understand how it might affect your credit score, and know what will happen to your credit card rewards. Before you make a decision, research the rules and regulations of the product change. You could lose accrued points, miss out on sign-up bonuses and be limited to certain cards.
And if your bank doesn’t quite have what you’re looking for, you can always shop for a brand new card from a different issuer.
*Information about the Visa Signature Flagship Rewards card has been collected independently by CreditCards.com. The issuer did not provide the details, nor is it responsible for their accuracy.