Should You Upgrade Your Capital One Card? – Forbes Advisor

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Upgrading your Capital One card can be a good option if you want the added benefits and rewards of one of the issuer’s most premium cards, but don’t care about earning a new bonus. welcome. Capital One can allow cardholders to switch to cards with different rewards, which means you can switch from a travel rewards card to a card with better cash back offers.

A few downsides come with an upgrade, and whether or not you should upgrade is up to you and your financial situation.

Should You Upgrade Your Capital One Credit Card?

There are benefits to upgrading your Capital One card – you may be able to earn better rewards or find a credit card that offers benefits that better suit your lifestyle. But the decision to upgrade is up to you and your financial and credit situation.

Before considering a credit card upgrade, make sure your account with Capital One is in good standing. A low balance and on-time monthly payments are usually the best way to stay in good standing.

Upgrading can be useful if your spending habits have recently changed. If you used to travel frequently but barely use your Capital One Venture Rewards credit card, you can upgrade or trade in to another Capital One card to earn cash back rewards instead.

Secured cardholders can also switch to an unsecured card when ready for a traditional credit card. Capital One will generally notify Secure Cardholders when it considers them eligible for an upgrade.

If you’re hoping to take advantage of a welcome bonus and possibly cancel the card later, upgrading might not be for you – welcome bonuses aren’t usually offered with account upgrades.

Does Upgrading Your Capital One Card Affect Your Credit Score?

Upgrading your Capital One card does not directly affect your credit score, but any change in your financial situation does carry the risk of a credit change. Capital One will transfer your existing line of credit to a new card instead of opening a new account. No credit check is required.

While there’s no direct effect on your credit score, it’s important to maintain responsible spending habits after upgrading to a better card. Low credit utilization can help improve a credit score, so if a card upgrade comes with a credit boost, beware of the risk of increased spending

Pros and Cons of Upgrading Your Capital One Credit Card

Upgrading to another Capital One card has its advantages, but also try to be aware of potential downsides.

Benefits of Upgrading Your Capital One Card

  • A credit check is not required: Upgrading your credit card means you are transferring an existing account to a new card. No formal application is required, which means your credit score must remain intact.
  • It may be easier to get approved for a card with more rewards: As long as your current Capital One account is in good standing, you will have a better chance of being approved for another card. Keep in mind that there may be a suggested credit rating for some cards.
  • Your card number, credit limit and APR will remain the same: The most important parts of your account will likely remain the same. If you want a higher credit limit, ask Capital One when requesting an upgrade.
  • You can upgrade between different types of reward cards: Capital One allows cardholders to switch between reward types by switching from a cash back card to a travel rewards card, for example.

Cons to Upgrading Your Capital One Card

  • You probably won’t be eligible for introductory offers or bonuses: Capital One terms state that welcome bonuses and introductory APRs may not be available to previous or existing account holders.
  • Your annual dues can increase: Capital One charges high annual fees for its premium cards like the Capital One Venture X Rewards credit card. Going from an annual fee of $0 to $395 is a big step forward, and without a welcome bonus to offset the cost of the first year, it might be hard to justify or keep up with the fees.

How to Upgrade Your Capital One Credit Card

Before you upgrade from Capital One, make sure your current account is in good standing, which means you’ve always made payments on time and your balance has remained fairly low.

Cardholders can initiate a request by calling the number on the back of the card. Use Capital One’s online pre-approval tool to find out which cards you might be eligible for. For those whose cards already have an annual fee, plan your application before your next annual fee is due. This way, you won’t pay two annual fees over a short period of time.

Wait at least six months before switching to a new card. If you switch to a card with a higher annual fee, you’ll have to wait at least a year after opening the first account. The CARD Act prevents card issuers from increasing a cardholder’s annual fee within one year of opening a new account.

Be sure to track the transfer of rewards from the old account, especially when moving to a new card with a different type of reward. For example, if you switch from a cash back card to a card with travel rewards, your value may remain the same, but the cash back may turn into airline miles. Have a Capital One representative confirm terms and conditions and initiate a transfer.

Cardholders in good standing may receive a direct upgrade offer from Capital One, especially consumers with a secure card account. Any offer must include instructions on how to proceed.

Conclusion

Switching to another Capital One card can be helpful if your spending habits change or if you want to maximize your reward potential. Downgrading can also be beneficial if the annual fee is too expensive. Welcome bonuses and introductory offers may not be available to upgrade customers. If a welcome offer is important, try asking Capital One for an exception when requesting an upgrade, or requesting your new card with a formal request. Remember that a new account and a new application can affect your credit.

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