Switching credit cards

Switching from one credit card to another can be a sensible way of managing and improving your finances.

One of the reasons people switch credit cards is to take advantage of promotional interest rates:

  • Balance transfer credit cards typically offer a 0% interest rate for a set period of time, when you move debt onto it from your existing card(s). This usually means you’ll save money, since, during the promotional period, you won't be charged interest on your balance.
  • Purchase credit cards often charge low or no interest rates on purchases made on the card. The purchases can usually be made either in store or online. Again, the low interest rate is usually only for a set promotional period – after that, you’ll have to pay the standard rate.
  • Dual credit cards can offer the advantages of both balance transfer and purchase cards, but in a single card.

Another common reason to change your credit card is to consolidate debt – this means moving debt from multiple cards to just one. This can help you see how much you owe at a glance, and it can make budgeting and repayments simpler.

So, a credit card switch can be appealing for a variety of reasons. However, there are a few things to keep in mind before making the leap:

  • Balance transfer fee. You may be charged for moving your outstanding debt from one credit card to another. Check the terms and conditions of your new card to be sure.
  • Transfer limits. You can only transfer a balance that’s within the credit limit of the new card. For example, you couldn’t transfer £2,000 of debt from an old card to a new card with a limit of £1,500.

How can I switch credit cards?

Switching credit cards takes some organisation, but a good lender should be able to support you in making the transition. Here are some useful steps to follow:

  • Find a card that fits you. There are quite a few balance transfer and purchase cards in the market, so think carefully about your needs. Consider introductory rates, promotional period length, fees, and the standard APR applied after the promotional period. You can compare credit card deals from across the UK market with our comparison services. But remember, we’re a credit broker, not a lender† – this means we can help you find credit, but we can’t grant it
  • See if you’re eligible for the card you want. You can check your eligibility rating for credit cards when you use our comparison services. This helps you understand which cards you’re more likely to get approved for, so you can make well-informed applications
  • Try and improve your credit score before you apply. This can help you maximise your chances of getting a good deal. You can check your current Experian Credit Score with a free Experian account - and your Experian Credit Report can show you what’s affecting your score, so you can try and fix any issues
  • Make your application. You can usually apply for a credit card online, and 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. Learn more about applying for a credit card here
  • Activate your new card. It should arrive in the post with instructions about how to do this
  • Contact your new provider to make a balance transfer. This can usually be done online via the provider’s website or app, or through their customer helpline. They’ll usually contact the other providers on your behalf, to move the balance over from your old cards
  • Decide what to do with your old credit cards. You may choose to keep them open while your new credit card matures, as having a well-managed account in your credit history looks good to lenders, and can improve your score. However, you should take steps to avoid identity fraud, and be careful not to use your old cards accidently. Learn more about unused credit cards here

Do’s for switching credit cards

  • Do the math. The point of changing credit cards is to improve your financial situation – so work out the pros and cons of switching, versus staying where you are
  • Do consider other types of credit. It may be that a personal loan or overdraft would suit you better than a new credit card
  • Do be aware that every credit application you make will temporarily lower your credit score
  • Do try and pay off the card before the promotional period ends, and meet all minimum payments on time and in full. Otherwise, you may have to pay standard interest rates

Don’ts for switching credit cards

  • Don’t change your credit card too often. This can be costly, as there are often fees to pay when you switch. What’s more, chopping and changing your accounts doesn’t look good on your credit report – lenders typically prefer to see mature, well-managed accounts, as this indicates you’re a reliable borrower
  • Don’t make too many applications in a short space of time. This could lower your credit score, meaning you’ll be less likely to get approved
  • Don’t forget about your old credit cards, as this could put you at risk of identity fraud and theft