Switching credit cards
Credit cards have multiple uses but because our financial circumstances sometimes change, the one you have isn’t always the one that you need. If this is the case, how do you switch to a new credit card? Our guide explains
Key takeaways
Switching credit cards can be beneficial for obtaining better rewards, lower interest rates, or a card that aligns with your spending habits
Assess whether switching to a new credit card will benefit your financial situation more than other forms of credit
Confirm you can meet the new card’s repayment terms and credit limit requirements
You can switch cards even with an unpaid balance, often to a card with a lower interest rate
What to consider before switching credit cards
Switching credit cards can be a smart move. Whether you're looking for better rewards, lower interest rates, or just a change to better suit your spending habits, it's important to factor in your financial situation and the new card’s features before applying.
Why do you want a new credit card?
Identifying the right type of card is crucial and hinges on your reason for wanting a new one.
Are you looking to consolidate debt with a balance transfer card, or are you after the perks that come with a rewards card?
Maybe you need a 0% purchase card for a big buy you've been planning. Understanding your motivation will steer you towards the card that's most beneficial for your situation.
Later in this article, we'll delve into the specifics of what each card type has to offer.
Will it improve your financial situation?
Evaluate whether switching cards will actually enhance your financial standing.
Sometimes, the allure of a new credit card can be tempting, but other forms of credit like personal loans or overdrafts, might be more cost-effective for your needs. Consider the long-term benefits and potential savings before making a decision.
Is your credit score as high as it can be?
Your credit score plays a pivotal role when applying for a new credit card. A higher score increases your chances of approval and might secure you better rates.
It's worth using services like the our free Credit Score service to check your score for any inaccuracies and to get tips on how to improve it before you apply for a new card.
Can you afford repayments?
Credit cards can be a costly form of borrowing if you're unable to keep up with repayments. Before switching, ensure that you're capable of meeting the payment terms of the new card.
Also, consider if the credit limit on the new card will be adequate to cover any debt you're planning to transfer.
You won’t know the exact details of your new card when you apply
Credit cards are marketed through their most appealing features, such as the interest-free period and low APRs.
However, these only need to be offered to 51% of applicants and are generally reserved for new customers with the best credit histories.
You also won’t know your credit limit until your application has been accepted. It could mean you’ll receive a lower spending limit than you expected or that you might not be able to move all your outstanding debt to a new card, for example.
How do I switch my credit card?
Switching credit cards is a process that requires careful consideration.
Start by checking your credit score: Correct any errors and take any simple steps to improve your financial standing to help give you the broadest selection of credit card options when you apply
Choose the right type of card based on your financial goals
Check your eligibility for a new card. It will conduct a ‘soft search’ to help you apply in confidence, knowing your chances of approval and protecting your credit score
Fully understand the terms and conditions of your chosen card. This should include the fees and charges as well as the benefits
You're good to go. Once approved, activate your new card either online, over the phone or via an ATM
Decide whether to keep your old credit card account active or close it down. There are pros and cons to cancelling a card
What are the benefits and disadvantages of switching cards?
There are several advantages to switching credit cards, including:
Potentially lower annual percentage rates (APR)
0% interest offers on purchases or balance transfers
Opportunities to earn cashback or rewards on spending
No fees for overseas transactions
There are also a few potential drawbacks, such as:
Applying for a new card involves a hard credit check, which can temporarily lower your credit score
If you're transferring a balance, fees can be as high as 3-5% of the transferred amount, which may outweigh the savings
An additional credit card might encourage you to spend more, increasing the risk of accumulating debt
Closing your old card might mean losing any rewards, cashback, or other benefits you’ve built up
What credit card should I switch to?
Choosing the right card depends on your individual financial needs. Here are some options to consider:
0% purchase cards for financing big-ticket items without interest
Balance transfer cards for consolidating and paying off debt
Rewards cards for earning points on everyday spending
Travel cards for saving on foreign transaction fees
For those with multiple needs, combined balance transfer and purchase cards might be the answer. Money transfer cards and credit builder cards are also worth considering if they align with your financial objectives.
Personal Finance & Insurance Expert
Our expert says
“It’s healthy to assess whether your credit card is doing the job for you or whether there might be a better option, but saying you want to switch credit cards can be a bit misleading.
"For some of us, getting an additional credit card might make financial sense, for others having no credit card at all could be the smarter option.”
Other useful guides
If you’re looking to dive deeper, we offer guides on various topics such as consolidating debt with a credit card, whether it makes sense to overpay on your credit card, and what to know about credit card refunds.
Compare credit cards with MoneySuperMarket
When you're ready to compare credit cards, MoneySuperMarket is at your service. Our platform allows you to compare options using a soft credit search, which won't affect your credit score. Plus, you can see your likelihood of being approved for different cards.
MoneySuperMarket is a credit broker – this means we’ll show you products offered by lenders. We never take a fee from customers for this broking service. Instead, we are usually paid a fee by the lenders – though the size of that payment doesn’t affect how we show products to customers.
Frequently asked questions
Can I switch credit cards if I have an unpaid balance?
Having an unpaid balance doesn't necessarily preclude you from applying for a new card, but it will be taken into account by credit card providers.
One of the main reasons to switch credit cards is to transfer your balance to a card with a lower interest rate so you can clear the debt more economically.
Can I switch a joint credit card?
Joint credit cards are a bit of a misnomer as they don't technically exist. What's often referred to as a joint credit card is actually an account where there's a primary cardholder responsible for the debt. Understanding how these arrangements work is key before making any changes.
Author
Tim Heming
Personal Finance Expert
Tim Heming is a journalist and editor who has written about personal finance for national newspapers and consumer websites for 15 years. Tim enjoys providing no-nonsense information to help consumers...
Reviewer
Jonathan Leggett
Former Senior Content Editor
With over 15 years of experience in online content and journalism, Jonathan is a former MoneySuperMarket’s editor at large and works across our Broadband, Mobiles, Energy and Money channels. Along...
