Switching a Credit Card vs. Applying for Another: What’s the Difference?

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If you already have a credit card and you are thinking of getting a second one, you might come across the term “switching” or “product switch”. What does it mean and how is it different from applying for a new credit card?

Switching a Credit Card vs. Applying for Another: What’s the Difference?

Switching a Credit Card

Switching a credit card means that you are changing a credit card into another in the same financial institution. For instance, if you have an RBC Cash Back Mastercard and you would like an RBC Avion Visa Platinum instead because of the perks offered by the card, you can reach out to RBC and tell them that you would like to do a credit card switch. Once you receive and activate your new card, your previous card will be rendered unusable after 30–60 days.

There are two main benefits to switching a credit card:

  1. Unlike applying for a new credit card, switching a credit card does not affect your credit score.
  2. If you have a good payment history for the existing card you have, your financial institution may approve the switching to a higher-tier credit card that requires a certain threshold of annual income without requiring any proof of income at all. 

Applying for Another Credit Card

If you already have a credit card and you would like to have another one, you can submit an application for a new card. You might want to do so if you would like an additional stream of credit, or there is an attractive credit card that would complement your existing one.

Keep in mind that applying for another credit card means that your credit score would take a small hit, but it is relatively negligible in the long run. You might also want to avoid applying for different credit cards in short intervals of time, as this signals to lenders and financial institutions that you appear to be desperate for credit and thus your credit applications could be looked at with more scrutiny. Instead, try spacing out your credit card applications, perhaps at least 6 months from your previous one.

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