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Should I switch my credit card?

switch credit cards image
Robert Bester, Consumer Finance Expert

25th October 2021

4 minute read

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Have you thought about switching your credit card? It could be for a handful of reasons, such as the introductory offer coming to an end, or even that you’ve just paid it off and are ready to change.

Switching credit cards could be a good way to pick up extra benefits or perks while spending, but it isn’t for everyone. For example, if you are already struggling with paying off the balance of your current credit card or dealing with additional debt, then switching might not be the best option for you.

To understand what your options are when thinking about a credit card switch, have a read of our article below and find out what your next steps could be.

Why should I switch credit cards?

Wanting to switch credit cards usually comes from realising your card does not suit your current circumstances, whether it is the interest rate, perks or balance limit. There are several reasons you may choose to switch:

  • Paying too much interest – whether your 0% offer has expired or your interest rate is too high, you might be able to find a better rate with a new card so you pay less in interest
  • Introductory offer expired – if your offer has expired, it might become redundant to keep the card, especially if it has now got a standard interest rate
  • Take advantage of a new incentive or reward – you could have seen a new credit card with a better set of perks attached that are more relevant for your current spending habits
  • You have a different reason for getting a credit card – while your current credit card might have fulfilled a purpose, such as for spending or for an old balance transfer, perhaps you now have a new reason for getting one, such as building your credit score, saving on transaction fees while you travel or even earning cashback when you spend
  • Consolidate multiple debts – in the case of a balance transfer card, you might actually find that you can consolidate a number of existing debts onto one card and find yourself with a preferable interest rate in the process. But only if you are eligible to apply

If you want to find out more about different credit card types and how credit cards work in the UK, head over to this article here.

How can I switch credit cards?

If you’re in a position to switch credit cards, you might be wondering how you go about it, and what you will need to do first. Take a look at our handy checklist below:

  • Make sure you are in a position to switch – see if you can afford to pay off the remaining balance or make a balance transfer from your current credit card
  • Check your eligibility for a new card – use an online eligibility checker such as MoneyMatcher to see if you are eligible to apply. You can even check your credit report to get a more detailed look at your financial health
  • Apply for a new credit card – if you are eligible to apply or likely to be accepted, then you can choose to go ahead and apply for a new credit card. Alternatively, you can try and improve your credit score instead and apply at a later date
  • Clear the balance on your old card OR setup a balance transfer – once you’re ready to make the switch, make sure you can reduce your balance to £0 and cancel any standing orders from your current account. If you plan on transferring your balance from your old credit card instead, contact your new credit card provider to arrange the transfer
  • Close old credit card – unless you plan on using the old credit card for something else, cancel the card with your provider and destroy the physical card so you can’t use it anymore

Things to think about when switching credit cards

If you’re planning on switching to a new credit card, there are a few things you should consider before making the move:

  • Weigh up whether it is right for you – switching is only a good idea if it puts you in a better financial position and ultimately allows you to save money. If you are in any doubt, it could be worth sticking with your existing credit card for a little while longer
  • Think about existing debt – before applying for any new credit products, evaluate your existing debt and make sure switching isn’t going to put you in a worse financial position. You might be better focusing on paying off other debts rather than applying for anything else
  • Balance Transfer Fees – while some credit cards offer 0% on balance transfers, some charge additional fees. If you’re planning on transferring an existing balance then bear in mind you could have to pay more to switch
  • New credit card balance limit – another consideration for balance transfers is the new card limit. This will need to be big enough to incorporate your existing credit card balance, otherwise you will have to reduce it further before you switch. However, you will only find out your new balance once you apply so always check your eligibility first
  • Applying for a new credit card could lower your credit score – when you apply for a new credit product this will often impact your credit score. Make sure you always make the minimum payment and manage your borrowing to bring it back up again
  • Think about other forms of credit – while another credit card could be a good idea, you might find the same benefits with other forms of credit such as an overdraft or current account. Always do your research and make sure it is the best option for you

If you’re ready to make the switch to another credit card, head over to MoneyMatcher and check your eligibility first before you apply, using the link below.