How often can you change credit cards?
Changing credit cards can help you get a better deal, but switching too soon could hurt your credit score. Here's what you need to know.
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There's no hard and fast rule on how often you can change credit cards. Technically, you can apply and switch to a new card at any time. But if you apply for a few cards in a short amount of time, it can hurt your credit score and make it harder to get approved.
You can use this guide to learn more about how changing credit cards can affect your credit score, the potential benefits and how to decide on the right time to get your next card.
What happens when you change credit cards?
Before you can change credit cards, you need to find and apply for a new card. This step has an impact on your credit history because all credit applications (whether approved or not) are recorded on your credit report. When lenders are reviewing your credit report, multiple applications for credit in a short amount of time may be considered a red flag.
Instead, you may only want to apply for a new credit card once a year or every couple of months. How often you should apply for a credit card also depends on your current financial situation and credit score. If you have multiple credit cards and debt, you may want to consider consolidating them under one new card with a balance transfer.
Before you apply for a credit card, you should also check your credit score. Australian lenders will only approve applicants who meet the eligibility criteria and have a good or excellent credit score. You can check your credit score for free online through Finder.
As long as you keep your accounts in good standing, make timely repayments and check your credit score regularly, applying for a new credit card every year isn't necessarily a bad thing. If you're no longer using your old card, you may want to consider closing the account once you've activated your new card.
Check out our guide to applying for a credit card for some tips and the eligibility criteria to check.
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Benefits of changing credit cards
A key reason for changing credit cards is to get more benefits that what's offered on your current card. This could include:
- Bonus points offers. Some rewards cards and frequent flyer cards offer up to 120,000 bonus points on sign-up when you meet the spend requirements. As long as the requirements align with your budget, a bonus points offer can be an easy way to boost your points balance.
- 0% balance transfer offers. If you’re struggling to repay an existing debt that is attracting interest, you may want to transfer your debt to a card that charges 0% interest rate on balance transfers. These cards usually offer interest-free periods for introductory periods between 6 to 26 months. At the end of the promotional period, any remaining debt from the balance transfer will attract the revert rate.
- 0% purchase rate offers. If you're using your card to make purchases, you can save by switching to a card that charges a low interest rate or 0% interest for promotional period. If the card charges 0% for an introductory period, the standard purchase interest rate will apply once the promotion ends.
- Competitive fees. If you're paying a high annual fee, maybe you'll want to switch to a card that charges $0 annual fee for life or for the first year.
- Lower interest rates. If you're paying interest on your credit card balance, changing to a card that offers a lower interest rate can help you save on these charges. Finder analysis of credit card balances and rates has found the average Australian could save around $100 per year by switching to a low rate card.
Rather than applying for multiple credit cards at once, you should take the time to compare your options, understand the features and ensure you meet the eligibility requirements before you apply.
If you’ve applied for a credit card and have been rejected, you should wait at least a few months before applying for another. During this time, you should repay existing debts, improve your credit score and research credit card that you're eligible for.
See our guide for more information on why your credit card application might’ve been declined and what you can do to improve your likelihood of approval.
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