How to Upgrade or Downgrade Your Credit Card

A wallet full of credit cards is like a closet full of clothes: Items that seemed like a good idea a few years ago probably won’t be in style forever. Whether you want to upgrade a no-fuss card to one that earns rewards or you're looking to downgrade a high-fee premium card with irrelevant perks, it's often possible to make a switch.

Issuers refer to that move as a "product change," and there are several benefits to requesting one. You typically retain your existing account and card number, which means you also keep that account's credit limit and its length of credit history, both of which factor into your credit scores. And because you're not opening up a brand new account, it generally doesn't initiate a "hard pull" on your credit reports.

Here’s what to know about upgrading or downgrading your credit card.

The process of switching your card can vary among issuers, as can the possible effects on your credit. Call the number on the back of your card, and tell the representative that you’re considering an upgrade or downgrade. Ask the representative how the issuer handles product changes, what cards are available to switch to, whether the issuer will conduct a hard pull and how your fees will change.

Keep in mind that the issuer is the financial institution affiliated with the card, not necessarily the company the card is branded with. With an airline card, for example, call the bank, not the airline.

» MORE: Think twice about upgrading your credit card

Whether you want better rewards or a lower (or no) annual fee, switching allows you to right-size your credit card to get perks that better reflect how you use it. Compared with applying for a new card outright, upgrading or downgrading an existing card requires less effort. There’s no application to complete, and usually there's no hard credit inquiry.

And compared with closing a card, switching can be a much better move for your credit report. You're not losing an existing account (or its history or credit limit); you're merely changing the product attached to that account.

But there are also drawbacks to switching your card. For example, since you're not applying for a new card outright, you likely won’t be eligible for the sign-up bonus offered to new cardholders.

Also, when switching to a higher-tier card, you may have to begin paying an annual fee, or a higher one. While you may be able to ditch your current card's annual fee, you might also lose some ongoing perks that your original card offered. Be sure you don’t use them or won't miss them when they’re gone.

Additionally, whether you're upgrading or downgrading, make sure to ask your issuer what happens to the rewards you might have accrued on your existing card. If they transfer when you switch, no worries; but if they don't, go ahead and redeem what you can before making the switch.

Many issuers allow you to set your own billing date, and in some cases, they might even forgive a late payment if it's your first one and you ask nicely. In terms of actual changes to the features of the product you're carrying, you can also request:

A change to your interest rate

If you have credit card debt, negotiating a lower interest rate can help you save on interest rate payments, pay your debt down faster or lower your monthly debt payments. It can’t hurt to ask, and if you’re told no, you can pursue other options, like moving your remaining balance to a balance transfer card with an introductory 0% APR period.

A change in your credit limit

Your typical monthly spending can change over time, but your credit card doesn’t always keep up. If you’re otherwise happy with your card, you can ask for a credit limit increase — but know that this request can affect your credit score.

“If you ask for a credit limit increase, the lender may treat it as a new account application, resulting in a hard inquiry,” says Rod Griffin, director of consumer education and advocacy at Experian. “That could cause a small, temporary dip in your scores.”

Still, a higher credit limit can work in your favor over time. “The increase then might help your scores because it would reduce utilization rate,” Griffin says. “That’s assuming everything else stays the same and you don’t increase your balances.” Experts recommend charging 30% or less of your total credit limit each billing cycle.