Switching Credit Cards? Here’s What to Know

a women typing credit card information on a computer.

Credit cards are a cornerstone of modern financial management. They provide convenience, build credit, and often come with enticing perks like cash back or travel rewards. But as your needs and financial circumstances evolve, your current card might no longer be the best fit. Should you switch? And if so, how can you do it smartly?

Switching credit cards can open doors to new opportunities — lower interest rates, better rewards, and features that align with your lifestyle. However, it’s a decision that requires careful thought. Here’s what to consider before making the leap.

Why Should You Switch Credit Cards?

There are many beneficial and compelling reasons for you to explore new credit card options:

  • Maximize rewards. A new credit card might offer better rewards for categories you spend on most, like groceries, gas, or travel.
  • Lower costs. If your current card has high fees or interest rates, switching to a card with no annual fee or a lower annual percentage rate (APR) can save you money.
  • Upgrade in benefits. Credit cards often come with perks like airport lounge access, purchase protection, and travel insurance – ones that your current card may not offer.
  • Debt management. Balance transfer cards with 0% introductory APRs can be a great way to pay off debt faster.
  • Improve your credit. A new credit card with a higher credit limit can lower your credit utilization ratio, which is good for your credit score. Not ready to switch cards yet? One option is to ask your financial institution if it’s possible to increase your credit limit.

When Does It Make Sense to Switch to a New Credit Card?

Let’s explore scenarios where you should consider switching credit cards. It’s important to do your research, because sometimes it might not be advantageous for you to make a switch.

  • Your spending habits have changed. If you’re now traveling more or spending in new categories, consider a credit card that rewards those purchases.
  • Your credit has improved. With better credit, you may qualify for premium cards that offer better terms and benefits.
  • You’re paying high fees. If your credit card’s fees outweigh its rewards, it’s time to look for a better deal.
  • You’re managing debt. A balance transfer card can help reduce your interest payments and consolidate debt into a single account.
  • Your current card’s benefits are limited. Older credit cards may not offer the same competitive features as newer ones.

Does Switching Credit Cards Affect Credit?

Here are three of the main ways that a credit card switch can affect your credit score. The good news is that these are often temporarily if you use your card responsibly and pay your monthly bills on time.

  1. Credit inquiries. Applying for a new credit card triggers a hard inquiry, which may temporarily lower your score.
  2. Credit history length. Closing your old account reduces the average age of your credit accounts, potentially affecting your score.
  3. Credit utilization. Adding a new card can increase your total available credit, which may lower your utilization ratio — a key factor in credit scoring.

To mitigate negative impacts:

  • Avoid closing old credit cards unless necessary.
  • Space out new card applications to minimize multiple hard inquiries.
  • Keep balances low to maintain a healthy credit utilization ratio.

What to Look for in a New Credit Card

When choosing a new credit card, prioritize the features and benefits that matter most to you. There’s more to choosing a card than just good rates.

  • Rewards. Are perks such as cash back, travel points, or other rewards aligned with your spending habits?
  • Fees. Does the card charge annual fees, late fees, or foreign transaction fees?
  • Introductory offers. Are there 0% APR periods or attractive sign-up bonuses?
  • APR. What is the interest rate for purchases, balance transfers, and cash advances?

Should You Stick with Your Current Card?

As we previously mentioned, sometimes switching credit cards might not always the best solution. You might want to stay with your current card if:

  • It offers unique rewards. Some credit cards have grandfathered benefits that you can’t get elsewhere.
  • You have a longer credit history. A well-established account positively impacts your credit score.
  • You’ve negotiated better terms. Calling your card issuer may lead to reduced fees or improved benefits.
  • You want stability. If you’re planning a major purchase, such as a home or car, it’s wise to avoid disruptions to your credit score.

Make a Credit Card Switch with Confidence

Switching credit cards can be a smart financial move when done thoughtfully. By evaluating your needs, understanding the potential impact on your credit, and comparing options, you can find a card that works harder for you. Whether you stick with your current card or explore new options, the key is making a choice that supports your financial well-being.

Take your time, do the research, and consider cards that align with your goals — because the right credit card isn’t just a payment tool; it’s a partner in your financial journey.

TwinStar Visa Credit Cards: Your Partner in Financial Success

If you’re considering switching credit cards, TwinStar Credit Union offers a variety of Visa® credit cards tailored to your needs. Whether you’re looking for cash back or travel rewards. Explore our Credit Cards page to learn more and apply today.