Upgrading vs. downgrading your credit card

If you’re interested in a different credit card, your options might include upgrading or downgrading with your current issuer. Maybe your spending habits have changed since you got your current credit card. Maybe you’re interested in different rewards. Or maybe you aren’t using your card enough to justify its annual fee. 

Whatever the reason, learn about your potential options—and whether upgrading or downgrading is even the right way to think about it.

What you’ll learn:

• Some issuers allow cardholders to change from one card to another without closing their account or triggering a hard inquiry.

• Credit card upgrades and downgrades with the same issuer are commonly known as product changes. 

• Looking at how a change might affect rewards, fees and your credit scores can help you decide if swapping cards is the right decision. 

• Product changes may not be eligible for promotional annual percentage rates (APRs) or certain bonuses.

A credit card upgrade is a type of product change, meaning you swap your current credit card for a different card with the same issuer. Product changes generally don’t require a hard inquiry, meaning your credit scores won’t be affected.

When you upgrade your credit card, you’ll likely receive a new card but keep your existing account number. This new card will be subject to any terms and conditions of your new product. If your new card earns rewards, for example, you’ll be able to earn those rewards once you switch. 

If the card you want to upgrade to has an annual fee, you’ll need to have your account open for a full year before you can upgrade. That’s because the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) forbids credit card companies from increasing your annual fee within a year of opening your account. 

When you swap cards, you might have to forfeit some of the benefits of your current card. Things like introductory APR offers or early spend bonuses may not be available. Your interest rate may change too.

When you switch to a credit card with the same issuer that has a lower annual fee or fewer benefits, it’s still a product change. But it’s commonly referred to as a downgrade. This term can be misleading, though. It doesn’t mean you’re settling for a worse credit card. It may just mean the card suits your lifestyle and spending habits better. Even if it means letting go of some benefits or rewards.

When you downgrade a credit card, you’re not opening or closing a credit card account. Like with an upgrade, you’re simply transferring your existing line of credit to a new card from the same issuer. Your credit card and account numbers typically remain the same. 

Keep in mind that you may have to have your account open for a year before you’re eligible for any product change. But it all depends on the issuer’s policies.

“Upgrades” and “downgrades” aren’t official terms. So they might not be the right way to think about product changes. It’s easy to see why switching to a card with fewer rewards might be considered a downgrade. But it could be the right move if the new card is better for your finances. 

Similarly, pros and cons can be different for everyone. But if you’re interested in swapping cards, it could affect a few things.

• Rewards: You could earn additional rewards—or rewards that better align with your lifestyle and spending. You can check with your issuer to see how it handles rewards you haven’t redeemed yet. If your rewards structure is changing (like going from miles rewards to cash back), that can be helpful to understand too.

• Credit scoring factors: There are five major factors that affect credit scores. Changing cards alone may not affect your scores. But if swapping involves a hard inquiry or your credit limit shifts, your scores might change—sometimes for the better.

• Fees: If you change to a card with elevated rewards, that could mean an annual fee. It could still be worth it. You can determine for yourself whether you think you’ll use the benefits enough to justify additional charges. 

• Bonuses: You may not qualify for welcome bonus or introductory interest rate offers, because they’re typically offered only to new accountholders. If you’re interested in a bonus, you might have to apply for a new card.

• Options: You may not be able to choose the card you want to swap. But even an unexpected offer could be beneficial.

Each card issuer has its own policies and processes for upgrades and downgrades. But to change your card, it can help to have an on-time payment history and be in good standing. Issuers may also consider credit scores and credit history when making decisions about upgrades. 

Here are a few general guidelines to consider: 

1. Compare cards. Take the time to research different cards, compare your options and pick a card that’s right for you. Some things to consider include fees, rewards, eligibility requirements and benefits.

2. Check for card offers. Find out if you’re eligible for any swaps. Capital One cardholders can check for offers by signing in to their Capital One account. You can also ask Eno, your Capital One assistant, for help finding offers.

3. Accept an offer. If you’re approved for an upgrade, you can simply choose to accept the offer. If you’re able to keep your existing card and account number, you can keep using your account as normal and start enjoying your new benefits right away.

A credit card upgrade isn’t the only option. If you want to keep your current card but want more spending flexibility, you may be able to request a credit limit increase.

Instead of upgrading or downgrading your credit card, you may also consider applying for a new credit card. New accounts may be eligible for perks like an intro APR and welcome bonus offers. For example, new Venture cardholders can earn 75,000 bonus miles when they spend $4,000 within three months of opening their account. With an upgrade or downgrade, you may not be eligible for these benefits. 

And if you use your credit card responsibly, adding another line of credit could potentially help you improve your credit scores. This is because a new credit account raises your overall credit limit, which can help lower your credit utilization ratio. 

Keep in mind that new credit applications typically require hard inquiries, which can temporarily impact your credit. A single hard inquiry will generally only lower your scores by a few points. But applying for multiple credit cards in a short time can have a larger negative impact.

Whether upgrading or downgrading—or applying for a new card—what’s best for you depends on your circumstances.

If you’re happy with your credit card and it makes sense to apply for a second card, Capital One can help: 

• See if you’re pre-approved for credit cards without harming your credit scores. 

• If you’re looking to build your credit with responsible use, explore cards for people with fair credit. 

• Earn unlimited 1.5% cash back on every purchase, every day with a cash back rewards card. 

• Monitor your credit report and score with CreditWise from Capital One. It’s free for everyone, and using it won’t hurt your credit.