Upgrading vs. downgrading your credit card

Have your spending habits and financial goals changed since you got your current credit card? Maybe you’re ready to start earning more rewards. Or maybe you aren’t using your card enough to justify its annual fee. Whatever the case may be, it could be time for a change. 

If you’re interested in a different card, options might include upgrading, downgrading or applying for a new card. Learn how these options work and how they’re different—and whether upgrading or downgrading is even the right way to think about it.

Key takeaways

• So-called product changes let cardholders transfer their current line of credit from one card to another with the same issuer without closing an account or triggering a hard inquiry.
• Credit card upgrades and downgrades are types of product changes. 
• The terms “upgrade” and “downgrade” can be misleading. Swapping your card for one with fewer rewards and a lower annual fee, for example, can still be an improvement if it’s a better match for your needs and spending habits.
• Applying for a new credit card may come with advantages like introductory APR offers and early spend bonuses. But new credit applications typically involve a hard inquiry. Hard inquiries can temporarily hurt your credit scores.

Product change is an industry term that refers to the ability to switch from one credit card to another card with the same credit card issuer. Instead of opening or closing an account, the existing account and line of credit are transferred. 

A product change also generally doesn’t require a hard inquiry. Applying for a new credit card typically does. 

A credit card upgrade is a type of product change, meaning you swap your current credit card for a different card with the same issuer. 

When you upgrade your credit card, you typically keep your existing credit card number and account number. But your card and account will be subject to the terms and conditions of the new card. If your new card earns rewards, for example, you’ll be able to earn those rewards once you switch to the new card.

Each card issuer has its own policies and processes for upgrading credit cards. Some issuers may contact cardholders who are eligible for an upgrade. Or the cardholder may be able to ask for an upgrade. 

Eligibility requirements also vary by issuer. But generally, you need to have a good payment history and be in good standing. Issuers may also consider credit scores and credit history when making decisions about upgrades. 

If the card you want to upgrade to has an annual fee, you might have to have your account open for a full year before you can upgrade. That’s because the Credit Card Accountability Responsibility and Disclosure Act forbids credit card companies from increasing your annual fee within a year of opening your account. 

It’s also worth keeping in mind that you might have to forfeit the perks of your current card when you swap cards. And once you switch to the new card, you might not be able to take advantage of some of that card’s perks—like an introductory APR offer or early spend bonus.

If your current credit card no longer suits your spending habits and lifestyle, it might be time to consider a change. Here are a few scenarios that might make you think about upgrading your card: 

• You don’t earn rewards with your current credit card and are interested in maximizing your rewards potential.
• You do earn rewards, but they don’t align with your spending habits. For example, if you have a travel rewards credit card but aren’t traveling much, you may want to switch to a cash back rewards credit card.
• You want to upgrade a secured credit card to an unsecured credit card.
• Another card offers perks and benefits that are better suited to your lifestyle.

There’s another type of product change that’s sometimes called a credit card downgrade. But this term can be misleading. And it doesn’t mean you’re settling for a worse credit card. 

It’s all about perspective. If the new card suits you better—by having no fees, for example—you might still think of it as an upgrade. This can be true even if it means letting go of some perks and rewards.  

A credit card downgrade works the same as an upgrade. Really, they’re just two different names for a credit card product change. 

Like with an upgrade, you’re not opening or closing a credit card account when you downgrade a card. You’re simply transferring your existing line of credit to a new card from the same issuer. And your credit card number and account number also typically remain the same. 

Keep in mind that you may have to have your account open for a year before you’re eligible for any product change. But it all depends on the issuer’s policies.

You might consider downgrading your credit card for a few reasons. For example:

• You aren’t taking advantage of the perks of your current card.
• You’re not using your current card enough to justify its annual fee.

And remember, swapping your current credit card for one that works better for you doesn’t mean you’re settling for an inferior card. Getting a card that’s more aligned with your specific needs is a smart financial decision.

The exact steps for how to upgrade your credit card vary by issuer. And remember, some card issuers may reach out to you if you’re eligible for an upgrade. Or you may need to make the request yourself. If you’re a Capital One cardholder, you can sign in to your Capital One account to check for card offers. 

You may also want to take the time to compare cards to find the one that’s right for you before settling on an offer. Once you find the right card and get approved for a product change, all that’s left to do is accept the offer and enjoy your new card’s benefits. 

Instead of upgrading or downgrading your credit card, you may also consider applying for a new credit card. New accounts may be eligible for perks like an intro APR and welcome bonus offers. With an upgrade or downgrade, you may not be eligible for these benefits. 

And if you use your credit card responsibly, adding another line of credit could potentially help you improve your credit scores. This is because a new credit account raises your overall credit limit, which can help lower your credit utilization ratio. 

But keep in mind that new credit applications typically require hard inquiries, which can temporarily impact your credit. A single hard inquiry will generally only lower your scores by a few points. But applying for too many credit cards within a short period of time can have a larger negative impact.

Ultimately, everyone’s situation is unique. And whether upgrading, downgrading or applying for a new card is the best option depends on your own circumstances. 

If you decide to apply for a new card, you can compare Capital One credit cards to find one that’s right for you. Then you can see if you’re pre-approved for card offers before you apply. Pre-approval is quick and won’t hurt your scores.

New to credit or looking for your next credit card?

• Check for pre-approval offers with no risk to your credit score.

• Earn unlimited 1.5% cash back on every purchase, every day with Quicksilver.

• Explore Capital One’s credit cards for building credit with responsible use.