Should I Upgrade My Existing Card or Apply for a New One?

May 17, 2018

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Getting a new travel rewards credit card is a great way to earn a solid chunk of points with a welcome bonus, but a number of issuers offer incentives to upgrade existing cards as well. TPG reader Kristopher recently received such an offer and is wondering which route to take…

Question about the Amex Platinum (I currently have the Premier Rewards Gold). Is it better to upgrade to the Platinum via the email Amex sent me? Or, should I just apply outright for it? Is there an advantage either way? Do I get more points if I just apply?

TPG reader Kristopher

In this case, Kristopher has received a targeted offer to upgrade his Premier Rewards Gold Card from American Express to the higher-end (and more expensive) Platinum Card® from American Express. I actually did this exact same thing back in late 2016 and was offered a bonus of 50,000 Membership Rewards points, worth $950 based on TPG’s most recent valuations. I jumped at the chance and haven’t looked back, as I continue to get incredible value from the card.

But back to Kristopher’s question. This is a relatively common upgrade offer, though we’re also seeing these now to entice existing Marriott cardholders to upgrade to the Marriott Rewards Premier Plus Credit Card and to convince IHG members to upgrade to the new IHG Rewards Club Premier Credit Card. Which route should he choose, and what should you do if you find yourself in a similar situation with these or other cards out there?

Well there’s not necessarily an easy answer here, as it depends on a number of factors. Here are some key questions to answer as you come to a decision:

  • How do the bonus offers compare? Before even thinking about utilizing an upgrade offer over a new welcome bonus, be sure you know the differences between that offer and the “standard” welcome offer on the card. The Amex Platinum currently awards new cardholders 60,000 Membership Rewards points after you use your new card to make $5,000 in purchases in your first 3 months. If Kristopher’s upgrade bonus matches mine (50,000 points), that’s not a huge difference. If his offer is 25,000 points, as I’ve seen with at least one other reader, the upgrade becomes much less appealing.
  • Are you targeted for a higher bonus on a new card? While being targeted for a bonus for upgrading is nice, it’s worth noting that Kristopher may also be targeted for an enhanced bonus on the Amex Platinum as a new cardholder. We’ve read many reports of TPG readers receiving 100,000-point offers on the Amex Platinum through the CardMatch tool, so if you’re in the same spot as Kristopher, you’ll definitely want to check there.
  • Will it the benefits make it a worthwhile upgrade? Being targeted for an upgrade bonus is just part of the equation; you’ll also want to make sure that the earning rates and other perks on the card fit with your typical lifestyle. Otherwise you may cannibalize your earning power just to get a welcome bonus.
  • How will it impact your credit score? Another consideration involves the impact your decision will have on your credit score. Upgrading will essentially have no impact, as you’ll keep the same number, likely have the same line of credit and avoid a hard inquiry on your credit report. If you apply for a new card, this does result in a hard inquiry and temporary drop in your score. However, that temporary drop may be more than offset in the long run by gaining access to additional credit, thus lowering your credit utilization.
  • Do you want Chase cards in the future? The final factor is actually an off-shoot of your credit score but relates specifically to one issuer: Chase and its infamous 5/24 rule. When you apply for a card like the Chase Sapphire Reserve, you’ll likely be immediately denied if you’ve opened 5 or more new credit cards with any issuer within the previous 24 months. Upgrading an existing card doesn’t count toward this limit; applying for a new card does.

In the end, deciding to upgrade vs. apply as a new cardholder is entirely up to the individual. Just be sure you understand the above factors before making a final determination.

Thanks for the question, Kristopher, and if you’re a TPG reader who’d like us to answer a question of your own, tweet us at @thepointsguy, message us on Facebook or email us at info@thepointsguy.com.

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