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4 major considerations before upgrading your credit card

Aug. 28, 2022
8 min read
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Editor’s note: This guide has been updated with the latest information.


Getting a new credit card can be a great way to earn a large number of points or miles quickly, and it can also play an essential role in maximizing your everyday purchases. However, it may make more sense to upgrade an existing credit card in some instances rather than applying for a new one outright.

In fact, some issuers even offer bonuses to change products — but it’s critical to carefully consider both the pros and cons of going this route. Today, we’ll lay out the steps to take as you decide whether to upgrade a card or apply for a new one.

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Compare the bonus offers

The very first thing you’ll want to do is compare the bonus offers between upgrading a card versus applying for a new one. In many cases, this can be a fast process. Only a handful of credit cards offer bonuses for undergoing a product change — and virtually all of these are targeted to specific cardholders.

If you’re targeted for an upgrade offer, compare it to what you’d earn by applying for the card as a new cardholder. In most cases, it’ll be a lower offer, but it may be worth it due to the additional factors below.

For example, you might be targeted by Amex for a bonus of 60,000 points when upgrading from an existing card to a new one. However, the public welcome bonus may be 100,000 points, so you could be missing out on 40,000 points by upgrading.

Note that if you call customer service to upgrade, it’s a near certainty that you won’t enjoy any additional bonus. However, upgrading a card can still make sense, even without an offer.

Related: How 5 minutes of chat got me 85,000 bonus points plus $150

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Explore the benefits

Many top travel credit cards offer various benefits — from bonus categories on spending to automatic hotel elite status and various travel protections included. In some cases, shifting from a lower-tier card with fewer perks to a higher-tier one with more robust value — even without a bonus — could be worth it.

For example, let’s say you apply for the Chase Sapphire Preferred Card today, which allows you to earn a bonus of 60,000 Ultimate Rewards points after spending $4,000 on purchases in the first three months of account opening. After the first year, you start looking at upgrading to the card’s premium family member: the Chase Sapphire Reserve.

(Important note: You should never upgrade or cancel a new card until you’ve held it for at least a full year. Card issuers often view this as “gaming” and could try to claw back your welcome bonus.)

JOHN GRIBBEN/THE POINTS GUY

Now, this would incur an additional $455 in annual fees ($550 compared to $95 for the Sapphire Preferred). And there’s never been a public bonus offer to upgrade from the Sapphire Preferred to the Sapphire Reserve. Nevertheless, going this route could unlock a slew of additional perks:

Would you pay the equivalent of $155 for all of these additional perks? If so, upgrading in year two could make sense — even if there’s no bonus for doing so.

Related: Why I applied for the American Express Gold Card even without a welcome offer

Consider your credit score

Another factor in this decision is your credit score, which is one of the most important numbers to not only maximize your travel rewards but help with many other aspects of life — including car loans and mortgage rates.

When you apply for a new credit card, it will count as a hard inquiry on your credit report. This will temporarily drop your score by several points (though these inquiries fall off after two years). In addition, the new account will lower the average age of your accounts — since it will initially be 0 years, 0 months old. This could also harm your score.

However, a new card does have some longer-term, positive effects on your credit report. It’s a new account to make on-time, in-full payments (the number one factor of your credit score). It also is another line of credit. As long as you don’t start spending more, your credit utilization rate will go down. These are important items to consider when applying for a new card.

Upgrading a card, on the other hand, will generally have zero impact on your credit score. In many cases, you’ll even keep the same account number. And since the account remains active, it’ll retain all of its past glory — including its payment history and age. There’s no single “correct” decision here. It’s just critical to bear in mind how your credit score will (or will not) change given each option.

Related: TPG’s 10 commandments of credit cards

Remember application restrictions

Finally, there are several issuer-specific nuances that come into play here. We dig into these in-depth in our guide to upgrading credit cards. Here are a few important ones:

  • Chase’s 5/24 rule: Generally speaking, you may not be approved for a new Chase card if you’ve opened five or more new cards in the last 24 months. Upgrading a card, however, shouldn’t count toward this limit.
  • American Express’s one-bonus-per-card policy: Once you have held a specific American Express card, you’re generally not eligible for a welcome offer on that card again in your lifetime. The offer terms of the American Express® Gold Card, for example, say this: “Welcome offer not available to applicants who have or have had this Card or the Premier Rewards Gold Card.” Even if you upgrade, that should count as “having” the card — making you ineligible for any future welcome offer.
  • Card family restrictions: Finally, certain related cards have their own restrictions. For example, you can only earn a bonus on any Sapphire card from Chase once every 48 months. So in the above situation, a second-year cardholder of the Sapphire Preferred can’t earn a welcome offer on the Sapphire Reserve. You'd need to upgrade to the Reserve or sit tight with the Preferred — applying for a new card simply isn’t an option until you've gone 48 months from earning the initial bonus.
WYATT SMITH/THE POINTS GUY

For more information on these items, be sure to view our complete guide to application restrictions.

Bottom line

There are many decisions to make in order to maximize your travel rewards strategy — like selecting a preferred airline and favorite hotel loyalty program to earn your business. However, one of the most important things to decide is the portfolio of your travel rewards credit cards. And part of this is whether to upgrade an existing card or apply for a new card outright.

In many cases, upgrading won’t bring you a windfall of points or miles but it also won’t impact your credit score. And if you can fully utilize the set of perks on the upgraded card, it may very well be worth it.

Be sure to consider the above factors the next time you’re trying to figure out if upgrading a card in your wallet makes sense.

Additional reporting by Emily Thompson and Chris Dong.

Featured image by (Photo by Zach Griff/The Points Guy)
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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Our points-obsessed staff uses a plethora of credit cards on a daily basis. If anyone on our team wouldn’t recommend it to a friend or a family member, we wouldn’t recommend it on The Points Guy either. Our opinions are our own, and have not been reviewed, approved, or endorsed by our advertising partners.
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TPG featured card

Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards

2 - 10X points
10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day

Intro offer

75,000 bonus miles
Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

Annual Fee

$395

Recommended Credit

740-850
Excellent
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023
Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day
  • Intro Offer
    Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

    75,000 bonus miles
  • Annual Fee

    $395
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
    Excellent

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023