How to upgrade a credit card

If you want to take a step forward in the world of credit cards, maybe it’s time to upgrade a credit card. It’s a simple way to swap your credit card for another with more benefits – without having to apply for a new card.

An upgrade has its advantages, but there are also a few notable disadvantages. Here’s a full rundown on how to upgrade a credit card and decide if it makes sense for you.

How does upgrading a credit card work?

Upgrading a credit card involves replacing your current credit card with a higher card in the range of the card issuer. This usually means you get a new card with better benefits, a higher reward rate, and a higher annual fee.

You can also upgrade a secured credit card, which requires a security deposit, to an unsecured credit card. If your card issuer allows you to upgrade your secure card, your security deposit will be refunded.

Card issuers will only allow you to upgrade one credit card to another card in the same product line. Let’s say you have the Chase Sapphire Preferred® Card. You can upgrade to the Chase Sapphire Reserve®, which is a premium card in this range. But you couldn’t switch to a Chase United Airlines credit card because that would be like switching to another product line.

The technical term for an upgrade is a product change, which covers both upgrades and downgrades. Downgrading a credit card is a move in the opposite direction, often done to save money on a card’s annual fee.

What are the benefits of upgrading to a credit card?

The benefits of upgrading a credit card are as follows:

  • A credit card with more benefits: The main reason to upgrade a credit card is to get one that offers more value. Your upgrade may earn more rewards on your purchases, have more valuable perks, or both.
  • Keep your account history: Upgrading your credit card means you continue the account history you started with the old card which is good for your credit. The average length of time you have opened credit accounts is a factor in calculating your credit score, so closing a card and opening a new one could hurt your score.
  • No credit check: Card issuers can usually process an upgrade without performing a firm credit check. A new credit card application, on the other hand, would require a thorough investigation that would temporarily affect your credit. Keep in mind that there are exceptions, so you should check before upgrading if you are worried about your credit score.
  • Upgrade Bonus Offers: Sometimes credit card companies offer bonuses to upgrading cardholders, most often in the form of additional rewards.

What Are the Cons of Upgrading a Credit Card?

The disadvantages of upgrading a credit card are as follows:

  • No introductory offers: The biggest problem with credit card upgrades is that you are rarely eligible for the new card introductory offer. This means that you won’t get any signup bonuses or 0% introductory APR offers that new customers would get. Since big signup bonuses can be worth $ 500 or more, and some interest-free offers last over a year, you could be missing out on a lot of value if you switch to a new card instead of requesting it normally.
  • More expensive: Another downside of getting a better credit card is that in most cases you will pay a higher annual fee. Before you upgrade a credit card, make sure that the benefits of your new credit card will outweigh the cost.

How to upgrade a credit card

When you’re ready to upgrade a credit card, it boils down to two simple steps:

  1. Choose the new credit card you want. Remember, it must be in the same range as the credit card you currently have. If you are unsure which credit cards qualify, contact the card issuer. Explain that you are considering an upgrade and ask what your options are.
  2. Call the card issuer to request the upgrade. Credit card companies generally require you to call for any type of product change. When you call, tell them you want to upgrade your credit card and tell them which card you want.

Your card issuer will then approve or deny the upgrade request. If the old and new credit cards both cater to consumers in the same credit rating range, you have a good chance of getting approved.

This can be more difficult if you are trying to upgrade to a card with more stringent application requirements. The most common example would be upgrading from a secure card to an unsecured card. Secured credit cards tend to be the easiest cards to get. If you were previously only eligible for a secured card, you will need improved credit and a strong payment history to switch to an unsecured card.

Should I upgrade my credit card?

You should consider upgrading your credit card if you want to upgrade to a card from the same product line without re-applying for a credit card. Just make sure you don’t miss out on a great introductory deal.

Here are some examples of when it makes sense to upgrade a credit card:

  • You have created or replenished credit with a secure card: By switching from a secure card to an unsecured card, you can get your security deposit refunded while keeping the account open.
  • You have a student credit card and you have completed your studies: Since student credit cards are a popular choice as a first credit card, you may want to keep your own so that you can maintain a long credit history. But it’s also a good idea to upgrade your student card once you are finished with your education and have a more established credit history.
  • You plan to apply for a loan: When you have an upcoming loan application, you shouldn’t do anything that could reduce your credit, including applying for new credit cards. A higher credit score can make a big difference in the amount of interest you pay, especially with mortgages and auto loans.

If the credit card you want has a signup bonus, it’s usually better to apply for it instead of upgrading it. These bonuses offer so much value that you shouldn’t pass up on them. If there isn’t an introductory offer you’re interested in, then an upgrade is the best bet.

About Joan Ferguson

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