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A guide to switching credit cards

Switching credit cards can be a smart way of managing your finances. But it may not make sense for everybody.

We run through the steps to change credit cards and look at what you need to think about before you make the switch.

Switching credit cards can be a smart way of managing your finances. But it may not make sense for everybody.

We run through the steps to change credit cards and look at what you need to think about before you make the switch.

Written by
Alex Hasty
Insurance comparison and finance expert
Last Updated
26 JULY 2023
5 min read
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How to change your credit card in eight steps

If you’re ready to switch credit cards, follow these steps to make sure the swap goes to plan and you switch to a better deal:

1. Decide what you want the card for

Firstly, think about why you want to switch your card. For example, is it to take advantage of an introductory offer or is it to consolidate your debts? It may help to look at the types of credit card we compare so you can narrow down your options.

Compare the Market Limited acts as a credit broker, not a lender. To apply you must be a UK resident and aged 18 or over. Credit is subject to status and eligibility. 

2. Check your credit score

Having a good credit rating will help increase your chances of being accepted for the most competitive deals. Check if there’s anything you can do to improve your credit score before you apply for a card.

There are three main credit reference agencies in the UK that offer free credit score checks. They are Experian, Equifax and TransUnion.

If you spot any errors on your report, try to get them fixed as soon as you can. To do this, contact the credit reference agency and talk to the lender who provided the information you’re disputing.

3. Check your eligibility

Once you know which type of credit card you’d like to apply for, it’s a good idea to use our eligibility checker. This will show you the cards you’re most likely to be accepted for, without affecting your credit score.

Then you can compare interest rates, as well as any rewards or other benefits, to find the right card for you.

4. Do the credit card maths

Now that you know what’s available, it’s important to check that any new credit card you’re considering is right for your financial situation. Do the sums to make sure switching is the best choice for you.

A key factor in your decision could be the APR, or annual percentage rate, that you’re offered. APR is what borrowing will cost you each year, including interest and any charges.

Every card has a representative APR. This is available to at least 51% of successful applicants. But this doesn’t mean you’re guaranteed that rate. You’ll only find out the APR applicable to you when you apply.  

Remember, special introductory rates will expire after the promotional period ends. 

5. Apply for the card

When you’ve found a card that’s right for your needs, you can go ahead with your application. If you compare with us, you’ll be taken straight to the provider’s website with the click of a button.

6. Activate your new card

Once you’re approved for your new plastic, you’ll have to wait for it to be delivered, but it shouldn’t take longer than 10 working days.

When it arrives, simply follow the set-up instructions. You can usually activate your card via online banking, by phone or in a branch.

You might also like to set up a direct debit to make sure you don’t miss a payment. 

7. Transfer your credit card balance

If you’re transferring a balance from an existing credit card(s) to your new one, you’ll normally be asked to provide details at the application stage. Once your new card has been activated, your provider will usually complete the transfer on your behalf.

If this option is not offered to you automatically, you may be able to start the process on your new provider’s online portal or through your app. If you’re having trouble, give your credit card provider a call and they should be able to help.

8. Think about what to do with your old card

Now you have your new card, you’ll need to decide whether to cancel your old card.

​​​Closing your old card will reduce the risk of identity fraud and you won’t be tempted to spend on it again. But it also means that your credit score could suffer a temporary dip. This is especially true if your old card had been managed well over a long period of time.

If you’ve switched to a new card with a lower credit limit, your credit utilisation ratio might increase. In a nutshell, this is the portion of credit you’re using out of the total credit limit available to you.

Having less spare credit could lower your credit score. So it’s worth bearing this in mind, particularly if your credit score is low.

​​Why might I want to change credit cards?

You may be interested in a credit card switch because you want to:

  • Get rewards for spending, like cashback, vouchers or air miles.
  • Take advantage of a 0% promotional deal on purchases or balance transfers (or both).
  • Shift existing debt from multiple cards to one single card, to benefit from a better rate of interest and make repayments simpler.
  • Build up a more positive credit rating in the long run. Applying for a new credit card can lower your credit score in the short term. But if you consistently make your payments on time, this will let lenders know you’re reliable.

What should I ask myself before I swap credit cards?

If you’re thinking of switching credit cards, it’s worth asking yourself the following questions before taking the plunge: 

  • Is there a balance transfer fee?
    You’re often charged a one-off fee for moving outstanding debt from a credit card to a zero interest balance transfer card. This is typically worked out as a percentage of the amount transferred.
  • What’s the credit limit?
    You’ll need to make sure you don’t exceed the limit on your card. For example, if you’re looking to transfer a balance, you can’t move £1,500 of debt from an old credit card to a new card with a limit of £1,200.
  • Can I make my payments on time?
    It’s important that you’re able to pay off your credit card balance in full each month, or at least meet the minimum repayment. And if you choose a 0% promotional deal, make sure you’ll be able to clear the balance before the deal expires and a high rate of interest kicks in.
  • Is a new card the right option?
    Switching is only a good idea if it improves your financial situation, so don’t jump in without doing your sums first. You may want to consider other types of credit like a personal loan or overdraft as an alternative to a new card.

When should I avoid switching credit cards?

​​Every credit application you make will temporarily lower your credit score. So it’s not a good idea to make too many applications in a short space of time.

A lower credit score can affect your chances of securing credit or mean you’re offered higher interest rates. So, if you’re planning to apply for a mortgage or loan in the next 12 months, it might be best to hold off switching credit cards for the time being.​

And it’s a good idea not to change your credit card too often. Lenders are reassured by well-managed, longstanding accounts. You could also end up paying more in fees than you save in interest.

The content written in this article is for information purposes only and should not be taken as financial advice. If you require support on the products discussed here, please speak to your bank/lender or seek the advice of an independent professional financial advisor. We also have more information on our Customer Support Hub.

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Alex Hasty - Insurance comparison and finance expert

At Compare the Market, Alex has had roles as Commercial Associate Director, Director of Trading and Director of Growth. He’s currently responsible for the development and execution of Comparethemarket’s longer-term strategic options, ensuring the right breadth of products and services that meet customer needs.

Learn more about Alex

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