How to Change Your Credit Card Without Closing It

Want to change your credit card without closing your account? It's entirely possible. Here's how.

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A few months ago, one of my self-employed money-nerd friends mentioned how much she loved her business cash back card. She could earn 5% cash back in certain categories, and 2% on everything else.

That's when I realized the business cash back card she was touting was probably a better fit for my needs. The thing was, I was hesitant to open another business credit card, and I didn't want to close my current card to get a new one. The good news you can change your credit card without closing it. Here's how:

Know Your Why

Before you decide to swap cards, know why you want to change your credit card. A couple of reasons might include:

• Your spending habits have changed. When I first opened my business card a few years ago, pre-pandemic, I chose it for the travel-related perks. Soon after I opened it, I was stuck in quarantine, like everyone else on the planet

  Fast forward to the present, and I found that I mainly used my card for everyday business expenses, such as marketing, gas for my car, and supplies and software. So I would prefer to switch to a card with a higher rate earning points on everyday spending.

  If the credit card benefits are no longer line with your needs or spending habits, you want to swap cards. You might want to switch to a travel card, or, if you're like me, a flat cash-back card might be a better fit. Or maybe you'd like to upgrade to a different card with more robust perks.

• You want to save money. If your card comes with annual fees and you don't find yourself tapping into its perks, you might want to downgrade to a card with fewer perks and a lower redemption rate but no annual fee.

Make the Switch

Also known as a product change, downgrading or upgrading your credit card is quite a simple process. Note that you can only switch credit cards with the same bank or credit card issuer. For instance, you can only change to another Discover card if you have a Discover card. Or, if your existing credit card is with Chase, you can only swap for a card within the Chase product line.

To make change, you reach out to the bank or credit card issuer, and let them know you'd like to change to a different card, but keep your existing credit line open.

Know How It Impacts Your Credit

There's a few way that changing your card, instead of getting a brand new card, can affect your FICO® Score:

• Won't shorten your credit history. When you change cards instead of getting a brand new card, a big advantage is that it won't close your account. In turn, it won't impact the length of your credit history, which makes up 15% of your FICO® Score.

• It could impact your credit utilization ratio. If you're switching to a card with a higher credit limit, this might decrease your credit utilization, which makes up 30% of your score. For example, let's say you have a current balance of $3,000, and the credit on all your credit cards is $12,000. In that case, your credit utilization ratio is 25%.

  If you switch to a card that brings your total limit to $15,000, it'll lower your credit usage to 20%. As the lower the credit usage, the better for your score, this would be a beneficial move.

• May prevent a hard inquiry. When you get a brand new card, there's a chance the bank or credit card issuer will make a hard inquiry, which could negatively impact your credit. But if you switch cards with your current card issuer, you already have a history with your existing card and aren't opening a new account, which may prevent a hard pull.

Understand what you're getting into

Before you make the switch, you'll want to check and see what the new APR, payment due dates, and fees that come with your potential new card.

As for rewards points, depending on the card you're swapping with, you might be able to keep the rewards you're earned on your current card. It depends on the card, so check this beforehand.

Annual credit card fees are usually due on your anniversary month, or the month you opened your card. So if you opened your account in September, try to do the product swap before your anniversary month rolls around. You might also want to time the swap so that you don't unnecessarily pay the annual fee on your existing credit card without good cause.

Changing your credit card without closing your current account can bring new life to a card collecting dust in your wallet. Plus, it might not hurt your credit. Knowing how it works and following a few easy steps can make for a smooth swap.

Get your FICO® Score from FICO, for free. No credit card required.

Jackie Lam

Jackie Lam is a personal finance writer whose work has appeared in Salon, Business Insider, and GOOD.