How to Upgrade a Credit Card

Getting a credit card is one of the stepping stones on your journey into adulthood. And for many people, it happens young. According to one study by the Motley Fool, 20 is the average age at which most Americans get their first card.¹ But by the time you’re in your late 20s or early 30s, that card might no longer meet your financial needs.

As your life circumstances change and your income likely rises thanks to annual raises, promotions, or job changes, you might be looking to upgrade your credit card to one with better rewards, benefits, and features. You may also finally be able to afford a card with a larger annual fee. The good news is that the upgrade process is simple if you want to stay with the same card issuer.

In this article, we’ll review what a credit card upgrade is and how to upgrade your credit card.

A credit card upgrade means switching from one credit card to another in the same product line with the same issuer. The new card may have expanded benefits and perks, often for a larger annual fee. For example, you may have selected a no annual fee credit card when applying for the first time. But now that you have an established credit score, more disposable income, and want to spend more money on travel, choosing the best rewards credit card for travel may better align with your spending habits and financial goals.

Before you upgrade your card, think about its impact on a few key things, including:

• Existing Rewards
  If your current credit card tracks rewards through points or cash back, talk to your issuer to see if rewards expire or transfer to the new card. If rewards expire upon upgrade, you’ll know you have a certain period to use or lose them.
  
  
• Existing Card Number
  Ask your card issuer what happens with your existing credit card number and account number when you move to the upgraded card. Some issuers will deactivate your existing card number and issue a new one, while others may keep the card number the same. Either way, you’ll receive a new physical card in the mail that reflects the upgraded product line.
  
  
• Welcome Offers
  Since you’re not technically a new applicant with the card issuer, you may not be eligible for welcome offers. However, it’s smart to contact your credit card company and ask, just in case.
  
  
• Credit Limit
  If you’re looking to boost your buying power, you may want an upgrade with a higher credit limit than your current one. Since a higher credit limit can lower your credit utilization, switching cards could end up being a net positive for your credit score.

Upgrading your credit card requires only a few simple steps.

1. Make Sure You’re in Good Standing
   Upgrades may only be available to a card member with a history of on-time payments or those with a certain credit score. If you’ve missed payments recently, you may want to establish a stable payment history over the next few months and then contact your issuer to apply for the upgrade.
   
   
2. Review Card Options
   Check your credit card issuer’s website to see the different types of cards they offer, or contact a representative via phone who can share card options and assess which might be best for you.
   
   
3. Contact Your Card Issuer
   You’ll need to contact your card issuer to apply for an upgrade. You can typically do so by calling the number on the back of your current card. Based on your history with the issuer, they can allow or deny your request to upgrade.
   
   
4. Negotiate
   While you’re discussing upgrading the card, it makes sense to ask your issuer if you can get any other benefits. After all, you may be paying them a hefty annual fee to upgrade cards, so they might be receptive to your request for a welcome offer, higher credit limit, or waived annual fee.
   
   
5. Receive Your Card and Update Your Payments
   Once you receive your new card information, you’ll want to update it for any services where you’ve set your current card as the payment method, including any recurring subscriptions or services. Reviewing your prior three months of credit card statements is an easy way to determine which accounts you’ll need to update.

As you review options for cards to upgrade to, you’ll want to check a few key things.

• Card Rewards and Benefits
  Different credit card levels have different benefits. Be on the lookout for extras like airport lounge access and other travel perks, rental car insurance, and purchase protection, which can add value to the new card.
  
  
• Annual Fee
  Especially if you’re upgrading from a card with no annual fee, it’s essential to ensure that the annual fee amount makes sense for the benefits you’ll receive. If you believe you’ll get more value from the card by leveraging its benefits than you’ll pay for the fee, it’s likely worth upgrading.
  
  
• Annual Percentage Rate (APR)
  If you plan to carry a balance from month to month, the APR you’ll pay on purchases is a factor in choosing a card. When you contact your credit card company about the upgrade, ask if the APR will change for the card you want. The same goes for APR on balance transfers and cash advances if you use either option.

Downgrading a credit card is the process of trading in your existing credit card for one with a lower fee that’s considered more affordable but may also have fewer benefits. Similar to an upgrade, a credit card downgrade means you’re staying with the same card issuer, which typically won’t impact your credit score.

At certain times in your life, you might decide your current card is no longer meeting your needs, and a downgrade is the best next step.

For example, if you’re expecting a child, you might find the annual fee travel rewards credit card you’ve had (and loved) for years is no longer worth the price. Instead, you may choose a no annual fee credit card with cash back on everyday purchases. Rest assured, as seasons change, you can always upgrade your card later.

Before you downgrade a credit card, you’ll need to consider the impact it may have on:

• Your Current Points or Cash Back Balance
  Moving from one card to another could mean you lose valuable points or cash back associated with the current card. Speak with your insurer to confirm if points will expire or move to the new card.
  
  
• Lounge Access, Rental Car Insurance, or Other Benefits
  Since downgrading to another card often means fewer benefits, you’ll want to confirm which benefits you’ll retain and which ones are a thing of the past.
  
  
• Welcome Offers
  Since you’re an existing card holder, you likely won’t have access to welcome offers. However, you may be able to negotiate this with your issuer if you’ve been a loyal customer with a history of on-time payments.