Upgrading vs. downgrading your credit card: Pros, cons and tips

As your financial goals change, the credit card that worked well for you in the past may no longer be the best fit. Upgrading your credit card is a common strategy that can offer better rewards, travel benefits or a higher credit limit without the need to open a new account. You may consider downgrading your credit card if your current account's annual fee or perks no longer make sense.

With a credit card product change, you can switch from one credit card to another within the same issuer without having to open a new account. Understanding the pros and cons of both options can help you choose a credit card that works best for your financial priorities.

What does upgrading your credit card mean?

Upgrading your credit card means moving to a higher-tier card with the same issuer. These cards often feature higher rewards rates and valuable benefits like travel protections or travel credits, though they may carry an annual fee.

You might receive an invitation to upgrade your credit card via mail, email or in your online account — or just contact your issuer directly. Most issuers do not require a hard credit inquiry for a product change, so your credit score usually won't be affected.

What does it mean to downgrade your credit card?

Downgrading your credit card may be helpful if you're looking for an option that fits your current lifestyle or budget. A credit card downgrade could result in a lower annual fee and a simpler reward structure.

This approach may be helpful if you're cutting costs or aren't benefiting from your card's perks. Downgrading also lets you keep your account open, which preserves its age and can help protect your credit score.

What changes when upgrading your credit card?

When you upgrade your credit card, some account features may change while others remain the same.

• Annual fees: Moving to a higher-tier card may bring a higher annual fee. Review the new terms carefully to ensure the benefits outweigh the costs.
• Credit limit: Some upgrades may include a credit limit increase if you qualify based on your credit profile. Ask the issuer upfront if your limit will change.
• Rewards and benefits: Upgraded cards often offer premium perks like higher cash back, VIP access, travel perks and airport lounge access. Ensure these rewards align with your spending habits and review the details to see which benefits will be added or removed as you switch cards.
• New card number: Your issuer should mail you a new physical card, which may include a new account number. This could also require a PIN reset. Update your autopay settings to ensure the timely continuation of your bill payments.

What to consider before upgrading or downgrading your credit card

Before making any changes to your credit card account, weigh the benefits and drawbacks to ensure it reflects your lifestyle and supports smart credit card use.

Benefits vs. cost

Premium cards often charge higher annual fees, but they can also offer valuable benefits. Some of these could include:

• Free or discounted subscriptions
• Event ticket presale and VIP access
• Concierge services
• Cash back options
• More rewards on travel, dining, groceries and other spending categories

If you use these benefits regularly, the extra fee may be worthwhile. If not, a lower-tier card could save you money.

Spending habits

The right rewards card should match the way you spend. For example, a card that offers bonus rewards on groceries, dining, or entertainment might be a better fit than one that focuses on travel if you rarely leave town. Review your monthly expenses to decide whether upgrading your credit card is likely to pay off.

Issuer policies and other cards you hold

Some issuers make upgrades or downgrades easy, while others may limit your options. It's also worth considering the credit cards you already have — overlapping rewards or benefits could make an upgrade unnecessary.

Taking time to review these factors can make it easier to choose the card that works best for your spending, budget and long-term financial goals.

Does upgrading or downgrading your credit card impact your credit score?

In general, upgrading or downgrading your credit card with the same issuer does not require a new account application, and the request usually won't trigger a hard credit inquiry. So, your credit score shouldn't take the typical short-term dip that often comes with opening a new account. In cases like with Citizens cards, an application is not required and a product change does not require a credit pull.

Keeping the original account open also preserves the age of your credit history, which is a positive factor in most credit scoring models. In contrast, closing a long-standing card could potentially hurt your credit score when the account eventually falls off your credit report (after around 10 years for positive accounts).

However, a change to your card's credit limit could affect your credit utilization ratio. A reduced limit may raise your ratio and potentially lower your score, while a higher limit could help reduce utilization and improve your score if balances are managed responsibly.

If you're considering a downgrade, it's generally better for your credit health than closing a credit card altogether. Switching to a low-fee or no-fee credit card can save you money while hopefully preserving your account credit history and credit utilization ratio.

Upgrading, downgrading or applying for a new card: How to decide?

When upgrading your credit card or downgrading one, neither choice is automatically better than the other. Instead, you'll want to consider several details before you make your final decision.

Start by reviewing your current account setup. If you share your existing account with someone else, upgrading or closing the card could affect them as well.

You can also use your bank's credit card comparison tool or speak with a representative to review available upgrade options.

No matter what you decide, be sure to time your switch carefully. For example, consider upgrading before you begin your holiday shopping or a major travel month to unlock new benefits in time for your trip. Or wait until after you've redeemed any expiring rewards tied to your current card. And note annual fee timing so you don't have to pay twice for the same benefit.

Ready to upgrade your credit card?

Review your current credit card's rewards, benefits and fees to see if it still fits your lifestyle. If not, upgrading your credit card might help you get more value from your spending.

Explore your options and choose a card that fits your lifestyle and goals. Compare Citizens credit cards to find the right upgrade for you.