Upgrading vs. swapping vs. applying for a new credit card

Have your spending habits and lifestyle changed since you got your current credit card? Maybe you’re ready to start earning more rewards for your purchases. Or maybe you aren’t using your card enough to justify its annual fee. Whatever the case may be, it could be time for a change.

If you’re interested in a new credit card, you have options. You could upgrade or swap your current card. Or you could apply for a new card. But what exactly are upgrades and swaps? How do they work? And how is upgrading or swapping different from applying for a new card? Read on to learn the answers to these questions and more.

A credit card upgrade or swap is known as a “product change.” With a product change, you switch from your current credit card to a different credit card with the same credit card company.

When you upgrade or swap your credit card, you typically keep your existing credit card number and account number. But your card and account will be subject to the terms and conditions of the new card. If your new card earns rewards, for example, then you’ll be able to earn those rewards once you switch to the new card.

Keep in mind that credit card companies set their own policies for product changes and eligibility. But to upgrade, you usually need to have a good payment history and be in good standing. You also might need to have a certain credit score in order to qualify for an upgrade.

And if the card you want to upgrade to has an annual fee, you might have to have your account open for a full year before you can upgrade. That’s because the Credit Card Accountability Responsibility and Disclosure Act forbids credit card companies from increasing your annual fee within a year of opening your account. Swaps, on the other hand, may be allowed before the one-year mark. But it depends on the credit card company’s policies.

It’s also worth keeping in mind that you might have to forfeit the perks of your current card when you upgrade or swap. And once you switch to the new card, you might not be able to take advantage of some of that card’s perks—like an introductory APR offer or early spend bonus.

You can check with your credit card company to find out for sure.

Upgrading your credit card could be a good idea if you’re currently missing out on rewards or benefits. For example:

• You don’t earn rewards with your current credit card and are interested in upgrading to a rewards card.
• You do earn rewards, but you aren’t earning anything for the purchases you typically make—like if you have a travel rewards card but aren’t traveling much.
• Other cards offer benefits that are better suited to your lifestyle.

By upgrading to a card that’s a better match for your spending habits and lifestyle, you could start to earn rewards for more of your purchases. And you could take advantage of the benefits a different card might offer.

You might consider swapping your credit card for a few reasons. For example:

• You aren’t taking advantage of the perks of your current card.
• You’re not using your current card enough to justify its annual fee.

Swapping to a card that has a lower annual fee—or no annual fee, for that matter—could help you save money in the long run.

If you’re interested in a product change, contact your credit card company. They’ll be able to tell you whether you’re eligible for an upgrade or swap. They can also help you understand which cards you might be eligible for.

And if you’re eligible for an upgrade, your credit card company may proactively reach out to you with the opportunity.

Instead of upgrading or swapping your existing credit card, you could also consider applying for a new credit card.

New accounts may be eligible for additional perks—like an introductory APR or bonus rewards that you can earn if you spend a certain amount within a specific period after being approved. If you get the card by upgrading or swapping instead, you might not be eligible for those perks.

Applying for a new card also means you could add a line of credit without closing your existing card—closing your existing card could cause your credit scores to drop. If you use your credit card responsibly, adding another line of credit could potentially even help you improve your credit scores by lowering your credit utilization—a measure of how much of your available credit you’re using.

Ultimately, everyone’s situation is unique. And whether upgrading, swapping or applying for a new card is the best option depends on your own circumstances.

To see if you’re eligible to upgrade or swap, check with your credit card company.  

If you do decide to apply for an all-new card, keep in mind that applying for a new card can lower your credit scores—usually by just a few points—since it will typically result in a hard inquiry. And applying for too many credit cards within a short period of time can have a negative impact on your credit.

So, before you apply, check to see if you’re pre-approved. Capital One’s pre-approval tool, for example, lets you see if you might be approved for some of Capital One’s cards before you even apply. And it uses a soft inquiry—which means it won’t affect your credit scores.