How to Switch Credit Cards

Q: Can I switch credit cards to a lower interest rate?

Yes. Before doing so, always check with your current credit card provider whether they will agree to lower your interest rate on your existing credit card. If you have been a long-time loyal customer, they might agree to offer a lower interest rate, without having to switch credit cards.

Q: Can I switch credit cards within the same bank?

Most of the major credit card providers will let you switch cards for a new one with the same provider. However, there may be a few different rules or limitations, such as staying within the same card family.&#xA0; Always shop around first to make sure you find the best deal.

Q: Can I do a balance transfer within the same bank?

Transferring debt between credit cards within the same bank isn&#x2019;t usually allowed. This will result in the bank losing money. For example, you have existing credit card debt with a lot of interest and you switch to a 0% balance transfer card with no interest. If this happened in the same bank, they would lose out on the interest they were charging. This means they might make a loss on the money you borrowed. Therefore, if you are looking to perform a balance transfer, you will have to look at <a href="https://www.latestdeals.co.uk/guides/borrowing/balance-transfer-credit-cards-guide">0% balance transfer cards</a> on offer from different banks.

Q: Can I move credit card debt to another card?

You can move credit card debt to another card by using a balance transfer card. <a href="https://www.latestdeals.co.uk/guides/borrowing/balance-transfer-credit-cards-guide">Balance transfer cards</a> don&#x2019;t tend to charge interest for up to 36 months. These can be a great card to switch to if you have a lot of <a href="https://www.latestdeals.co.uk/guides/borrowing/credit-card-debt-guide">credit card debt</a>.

Q: Is it a good idea to transfer credit card balances?

Doing a balance transfer can be a great idea if you are struggling to pay high-interest <a href="https://www.latestdeals.co.uk/guides/borrowing/credit-card-debt-guide">credit card debt</a>. <a href="https://www.latestdeals.co.uk/guides/borrowing/balance-transfer-credit-cards-guide">Balance transfer credit cards</a> come with a 0% interest offer that can last up to 36 months. This will help you to pay off your debt quickly without adding interest on top.

Q: How many credit cards is too many?

It depends on how you use your credit cards. If you are sensible with your spending habits and only use credit cards for certain things, then it&#x2019;s okay if you have multiple cards.&#xA0; However, if you have loads of maxed-out credit cards that you are overspending on, this isn&#x2019;t ideal. Try to only own credit cards that you really need and have a set purpose for each card to keep your spending in check.

Q: How many credit cards should I have?

There isn&#x2019;t a set number of credit cards that you should own. The average number of credit cards per person in the UK is 1.7. So, we could round this up and say two is the perfect number. However, it depends on why you want or need credit cards. If you want one credit card for <a href="https://www.latestdeals.co.uk/guides/borrowing/best-travel-credit-cards">travel</a> and one for <a href="https://www.latestdeals.co.uk/guides/borrowing/best-0-purchase-credit-cards">purchases</a>, then two could work. If you want one credit card to serve as an all-rounder, then you might only need one. You might even find that you don&#x2019;t need a credit card at all! It completely depends on how and why you want one.

Q: Is it bad to have a lot of credit cards with zero balance?

Not necessarily. If you have cleared all your debt on old credit cards, then it doesn&#x2019;t harm to keep them open. Having open credit cards will lengthen your credit history and keep your credit utilisation low. This is because you have a high credit limit as you have lots of cards. However, you aren&#x2019;t using any credit on those cards and so your credit utilisation is low. This will improve your credit score.&#xA0; Just make sure you store old credit cards in a safe place.

Q: Should I close inactive credit cards?

If you don&#x2019;t use your credit card at all, your card provider may close it due to inactivity. You could be at risk of fraud if you don&#x2019;t store your credit card safely or keep track of your statement.&#xA0; However, keeping old cards open can also benefit your credit history and score.&#xA0; We would suggest that you use old credit cards every now and then for small purchases. This will keep your account alive and active but you won&#x2019;t mount up any debt.

Q: Will switching credit cards damage my credit score?

If you close an old credit card and open a new one, your credit history will reduce and so your score will be lowered. However, if you can switch your old credit card account over to the new one, then your history will remain the same.&#xA0; If you are switching credit cards within the same bank, they might agree to keep the same account open for the new credit card. As long as you are smart about it, switching credit cards shouldn&#x2019;t be too detrimental to your credit score.

Fiona Leake

Updated 4th February 2021

Have you thought about switching credit cards? This can be a great way to manage your finances but making the switch requires planning and consideration. Whether you are hoping to switch credit cards to a lower interest rate or within the same bank, our guide is here to help make the process as simple as possible.

In this guide

Why switch credit cards?

Switching credit cards can be a great way to manage and potentially improve your finances. You can take advantage of a better card on offer or use the switch to pay off your debts.

Three of the main reasons you might want to switch are:

Better rewards - you might switch credit cards to one that offers more rewards such as cashback or airmiles.
Lower interest rates - if you are being charged a lot of interest on your card, you might consider switching to one that charges less.
Repay debt faster - switching your regular credit card for a 0% balance transfer card will allow you to shift the original high-interest debt onto a new card. This card will charge 0% interest for a set period of time. Focus on paying your debt faster, without added interest.

Should I switch credit cards?

Deciding whether to switch credit cards depends on your situation. However, there are some things to consider before switching cards. It’s important to have a plan in place beforehand and knowing these things can help you to formulate that plan.

1. How it might affect your credit score

Credit limit - if you switch cards to one with a larger credit limit, your credit score could increase. This is because your credit utilisation will be lower. Credit utilisation is the amount of credit you owe vs your credit limit. Lenders like to see credit utilisation below 25%. So, if your new card has a higher limit of £4,000 and your balance is £500, your credit utilisation will only be 12.5%. If your old card had a limit of £2,000, you would have been using 25%.
Credit age - the length of your credit history makes up 15% of your overall credit score, so it’s pretty important! If you swap an old credit card for a new one, your credit history could decrease along with your score. However, you can ask your credit card provider to count the two switched cards as one account. This wouldn’t affect your credit history. You can only ask this if you are switching within the same bank.
Credit search - some banks will switch your credit cards without doing a ‘hard search’. Hard searches appear on your credit history and can lower your score. However, sometimes banks will still carry out a ‘hard search’ if you are switching cards.

2. Plan ahead for 0% interest offers

Your new credit card might come with 0% interest on purchases or balance transfers. But this offer won’t last forever and the standard interest rate will kick in once the introductory period ends.

Plan ahead to make sure that you can clear your balance before the end of the period so you make the most of switching cards.

Set up a direct debit to pay back the money every month and set multiple calendar reminders so you don’t forget!

3. Ask what happens to credit card rewards

If you are switching from one cashback card to another, you should be able to keep the cash you earnt on your old card and switch it to the new one. However, if you are switching from cashback to airmiles, for example, you should ask your provider what will happen to the rewards.

Always check what will happen to your rewards before making the switch. In some cases, you might lose them entirely, so carefully consider this before changing cards.

4. Ask yourself these questions before you switch

Before deciding to make the switch from one credit card to another, consider the following questions:

Is there a balance transfer fee? If you are switching credit cards to shift high-interest debt onto a 0% balance transfer card, check if you will be charged a fee for making this transfer. Balance transfer fees are often worked out as a percentage of the balance transfer, meaning this can add to your debt. For example, if you want to transfer £2,000 to a new card with a balance transfer fee of 5%, you would end up owing £2,100 on the new card.
What’s the credit limit? Make sure the credit limit is higher on the new card, this will reduce your credit utilisation ratio. You also don’t want to transfer your old balance onto a new card with a limit lower than the total balance. If you exceed your credit limit, you will be charged a fee.
Will I be able to pay it back? You should aim to completely pay off your credit card each month. However, if you are transferring a lot of debt, make sure that you can afford to pay it back before the 0% interest period ends.
Are the rewards worth it? If you are switching your standard credit card for one with rewards, make sure it’s worth it. Rewards cards tend to charge an annual fee and high-interest rates. Make sure the rewards suit your everyday spending and you’ll benefit from using them.

5. Ask your bank these questions before you switch

There are also a few questions you should ask your bank before you decide to switch credit cards. These questions are aimed at your existing provider and potential new provider.

Can I get a better deal? Ask your existing provider if they can offer more rewards, no annual fee or lower interest rates before you switch. They will want to retain you as a customer and might be able to improve your existing credit card.
What will my credit limit be? Aim for a higher credit limit when switching.
What interest rate will I have on the new card? If you are switching credit cards, don’t pay more interest than you were before!
Will the switch involve a ‘hard search’? Hard credit searches will appear on your credit history and can lower your score. If a hard search is required, always use an eligibility checker beforehand to help determine whether or not you should apply.
What about existing credit card rewards? You’ll want the rewards to switch to the new card, find out what will happen to them.
Will my balance transfer when I switch?
Will I get any sign-up bonuses? If you are switching cards within the same bank, you might not receive the same bonuses that new customers do.

How do I switch credit cards?

Follow our step-by-step instructions to help make switching credit cards an easy, stress-free process.

1. Decide what card you want to switch to

Why do you want to switch credit cards? Do you have a lot of credit card debt? Then a balance transfer card could be a good switch.

Or, have you improved your credit score and are now looking for a more rewarding card? Then rewards, cashback or airmiles card might be better for you.

You can take a look at our best credit cards to learn about the different types of card and which is the best in each category.

2. Use an eligibility checker first

Compare cards and narrow down your search. You can then use the eligibility checkers on the card provider’s website. These checkers indicate how likely you are to be accepted for each card.

Only apply to cards that you are likely to be accepted for. Do not apply for credit cards where the eligibility checker says you’re unlikely to be accepted. Only apply to one credit card.

3. Apply for your new card BUT ask questions

Once you’ve decided on one card, make sure you ask the questions we’ve mentioned previously to your bank. You want to make sure that you are switching to the best possible card that’s an improvement on your old one.

You can then go ahead and apply either online, by post, by phone or in-store at your nearest branch. Remember to have done an eligibility check first (see above)!

Credit card applications can take just minutes to approve. Once you’ve been approved, your new card should arrive in around ten days.

4. Set up direct debits on your new card

Direct debits or standing orders that you had on your old credit card will now need to be set up on the new one. Also, make sure that you set up a direct debit from your bank account to pay off your new credit card bill every month.

Cancel any direct debits or standing orders on your old card once they are set up on the new one.

5. Decide what to do with your old credit card

Now that you’ve made the switch, you need to decide whether to close or keep your old credit card. If your old credit card charges an annual fee, it might be worth closing it as you are no longer using it.

However, if there are no fees associated with your old credit card, you could keep it open. Having a long, well-managed credit history can improve your score.

Switching credit cards do’s and don’ts

There are a few things you should and shouldn’t do when switching credit cards. Remember, you want to switch to a card that will improve your finances, so keep this in mind when applying.

Do’s

Do figure out the math - the main reason people switch credit cards is to improve their finances. Make sure your new card doesn’t charge an annual fee, has lower interest rates, offers 0% interest periods or offers more rewards.
Do consider other options - you might not need a new credit card if you are looking to borrow money. A personal loan might suit you better.
Do clear your balance before the offer ends - if you are switching credit cards to a 0% purchase or balance transfer card, make sure you can afford to clear your balance before normal interest rates are added. You can work this out before applying. If you can’t clear your balance, switching cards might not be worth it.

Don’ts

Don’t switch credit cards too often - constantly changing credit cards won’t look good on your credit report. Lenders like to see a consistent, long, well-managed credit history as it proves you are reliable.
Don’t apply for too many cards - if you apply for multiple new credit cards, your credit score could be damaged. You might appear to be desperate for money and struggling financially.
Don’t forget to switch direct debits - any direct debits or standing orders you’ve got on your old credit card need to be set up on the new one. Remember to cancel the old ones!
Don’t forget about your old credit card - if you keep your old card open, don’t forget about it and accidentally use it to make purchases or lose it. Old credit cards can be at risk of fraud.

I can’t meet my minimum credit card payments due to coronavirus. What should I do?

Coronavirus has put a financial strain on many. If you have a credit card and are struggling to meet your minimum repayments, you may be eligible for help.

The Financial Conduct Authority (FCA) has introduced measures that allow you to request a freeze on credit card repayments for 6 months. However, you may still be charged interest in this period.
You have until the 31st March 2021 to request a freeze but make sure you agree with your lender before stopping repayments. This won’t leave a bad mark on your credit history either due to the exceptional circumstances.

If you can afford to keep paying, it’s best to do so as you will still be charged interest during this holiday period.

All payment holidays must end by 31st July 2021.