Does switching credit card issuers affect your credit score?
Update: Some offers mentioned below are no longer available. View the current offers here.
Reader Questions are answered twice a week by TPG Senior Points & Miles Contributor Ethan Steinberg.
One of the most important factors that affect your credit score is the length of your credit history, which is why you want to be especially careful before closing any of your older cards as this could have an adverse effect on your score. TPG reader Billy wants to know if switching to a different issuer would impact his score ...
[pullquote source="TPG READER BILLY"]Hello I was wondering if switching card companies will hurt my credit score? I have been using Chase as my main issuer but am considering switching to Amex. Will my credit score crash by closing the significant amount of credit I have with Chase? [/pullquote]
For more TPG news delivered each morning to your inbox, sign up for our daily newsletter.
This is an interesting question, though it's one of just several things Billy needs to consider. First of all, your credit score doesn't change at all whether you use Chase, Amex, Citi, Capital One or someone else as your primary credit card issuer. Different types of cards, such as personal versus business or credit cards versus charge cards may report differently to the credit bureaus, but which issuer you use won't have any real impact.
However, the second half of Billy's question is much more important. Closing out an older credit card, especially one with a large limit, could really dent Billy's credit score. Not only would it decrease his average age of accounts, but it would also lower his total available credit making his utilization ratio skyrocket.
If he decides to switch to primarily using Amex cards, perhaps because the network of Membership Rewards transfer partners work better with his travel goals, here's what I would suggest doing to minimize the impact to his credit score:
- First, Billy should take his oldest Chase card and downgrade or product change it to a no-annual-fee product. If he primarily has Chase Ultimate Rewards earning cards he should pick either the Chase Freedom (No longer open to new applicants) or Chase Freedom Unlimited. Because these cards don't charge an annual fee, Billy can pick one to keep open forever. He doesn't need to use it regularly, just make a small charge every three to six months to keep the account from being closed.
- When Billy goes to close his other Chase cards, he should first ask to transfer his available credit lines to the Freedom or Freedom Unlimited so they don't get lost in the account closures.
The information for the Chase Freedom has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
By taking these two simple steps, Billy can keep his oldest Chase card active and open forever and not lose any of his credit limits when he closes his other Chase cards, effectively mitigating the two biggest risks to his credit score.
Related: Chase cash-back showdown: Chase Freedom versus Chase Freedom Unlimited
Bottom line
Your credit score won't be affected by which issuer you use for your primary cards, but closing out old accounts and switching to a new bank could create some problems. Downgrading to a no-annual-fee card, consolidating your credit limits around that card and then continuing to keep that card open can help you make the switch without your credit score dipping.
Thanks for the question, Billy, and if you're a TPG reader who'd like us to answer a question of your own, tweet us @thepointsguy, message us on Facebook or email us at info@thepointsguy.com.
Featured photo by Popartic/Getty Images.
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.