Is It Worth Switching Credit Cards?
Compare the two cards in dollars
Do not switch on a hunch. Put your current card and the candidate side by side in first-year dollars: earnings on your spending at a flat 1 cent, plus the welcome bonus, minus the annual fee. If the new card wins by a meaningful margin, a switch is justified; if it is a wash, the hassle is not worth it. The math is in how to compare credit card rewards.
Weigh the welcome bonus and the costs
A new card’s welcome bonus is often the biggest single reason to switch, since it can dwarf a year of ordinary earning. But weigh the costs: a new application adds a hard inquiry, a new account lowers your average account age, and downgrading or closing the old card can affect your credit. Keeping the old card open and simply adding the new one is often better than a true switch, as covered in how many cards to hold.
Keep, downgrade, or close
Switching does not have to mean closing the old card. You can often downgrade it to a no-fee version to preserve your credit history while you use the new card for spending. Run your spending through the rewards calculator to confirm the new card genuinely earns more before you move, then decide whether to keep or downgrade the old one.
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