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You might decide to switch your credit card for various reasons. Some of the main motives people have for thinking about switching credit cards include:
However, there are also a few things to keep in mind:
Work out what you want
You want a new card which fits your specific needs. Decide why you need a new card and what this card has to offer. Check out the rates and rewards of other cards your current provider offers, as well as cards offered by major banks and credit card companies. Use our comparison functionality to compare the possible new card with your current one.
Shop around and compare
Compare credit cards from a wide range of providers. The interest rates you’re offered, as well as any rewards or other benefits, could vary widely so it’s useful to have a full comparison. Be aware, any special introductory rates will expire after a certain period so be sure to factor this in when you work out your budget.
Be mindful of interest rates
A key factor in choosing the card which works for you will probably be the annual percentage rate offered. Annual percentage rate (APR) is the amount your borrowing will cost you each year, including interest and any charges. This will be a factor if you think you’re likely to keep the card after any introductory rate has expired.
Try to improve your credit rating before you apply
This can help you maximise your chances of getting a good deal.
Make your application
You can usually apply for a credit card online. Some providers will tell you whether you’ve been accepted within minutes. Alternatively, you may be able to apply in person at one of the lender’s branches.
Call your provider to switch if you’re staying with the same company
Switching to another card offered by your creditor is usually a simple process but will require filing a new application. A customer service agent will explain your options and help you make the switch. Let them know you currently hold a card with them but you’d prefer to carry a different card which offers different rewards or a better interest rate. Keep in mind you’ll have a better shot at negotiating if you have good credit and have been consistently paying your monthly bill on time.
Note: Even if it’s with the same company, switching cards will temporarily decrease your credit rating. Your rating can be restored quickly by ensuring you follow good repayment habits.
Open the new account before cancelling your old card
When you find an offer which fits your needs, fill out and submit the application form but wait until you’re accepted before cancelling your current card. If your card has a high credit limit and you close it when you submit your application, cancelling your current card will leave you with less available credit. If you have debt, your credit rating will be affected. That could cause the creditor to reject your application, leaving you with no lines of credit and a lower credit rating.
Activate your new card
Your new card should arrive in the post with instructions about how to activate it. It might require a trip to your bank or to an ATM. Once you’re in possession of your new card, follow the instructions and the set-up procedure should be straight forward.
Contact your new provider to make a balance transfer
Request the balance transfer from your old card. This can usually be done online via the provider’s website or app or through their customer helpline. Your old provider will usually contact the new provider on your behalf, to move the balance over from your old card.
Set up any direct debits and automatic payments on your new card
Remember to double-check which automatic payments and direct debits were scheduled to be paid from your old card and set up those payments on your new card. Check the due dates of the payments so you don’t end up paying twice.
Figure out what happens to any rewards you’ve earned
If you’ve been collecting Airpoints or other rewards, ask your creditor what happens to them if you cancel your card. Sometimes, rewards can be transferred or used, within a given period of time, after cancellation. Airpoints, FlyBuys, Cashback and other rewards are legitimate currency so make sure you aren’t throwing away money by cancelling the card.