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How to switch credit cards

This guide on how to switch credit cards outlines how to apply for and switch credit cards online.

Switching credit cards is simple - here's our step-by-step guide.

Compare credit cards

When planning to switch credit cards, the first step is to compare credit cards – we can find you the best card for:

0% balance transfer cards
0% purchase cards
Low-interest credit cards
Cashback credit cards
Reward credit cards
Sport credit cards
Charity credit cards
Establishing credit
Improving credit

Apply online for credit cards

With most credit cards, you apply online and get a decision straightaway. You'll have to answer a series of questions. These vary between credit card companies, but they usually ask about :

You - Your name, age, where you've lived for the past 6 years, and your residential status (homeowner, tenant etc).
Your job - Your income, type of employment, whether you are an employee or self-employed and how long you've been with your employer.
Your finances - What other borrowing you have, your mortgage payments, and how long you've been with your bank.
Balance transfers – What balances on other cards you want to transfer to your new card.
Additional benefits - You may be asked about payment protection insurance (which helps repay your balance if you're ill or lose your job), whether you want an additional cardholder (such as a spouse) and to register for any reward schemes.

Wait while your credit record is checked

Credit card companies will check your record at a credit reference agency, such as Experian.

Lenders use the agencies to share information about customers, such as how much they owe and whether they've made payments on time.

Your credit record includes electoral roll information (used to confirm your identity) and details of bankruptcies or county court judgments. It also includes details of any credit applications you've made.

Based on all this information, lenders will decide whether to grant you a card or not.

A few issuers also use the information to set the interest rate you pay – people seen as a better credit risk pay a lower rate.

Your application is confirmed

When your application is confirmed, you'll usually be able to enter into the credit card agreement online.

Make sure you read the agreement – there should be a simple summary of key information, such as the interest rate, fees, details of monthly payments and so on.

Set up a direct debit

You'll be able to set up a monthly Direct Debit as part of the application or once you've received the card. You can often choose whether to automatically pay:

the minimum amount;
a set amount (e.g. £500); or
the full amount.

Whatever you chose, you're free to make additional repayments whenever you like.

Although you don't have to set up a Direct Debit, it's worth doing one for at least the minimum amount to avoid any late payment fees.

You receive your new credit card

Your new card will be delivered to your house or work – you may need to sign for it.

You often have to phone the issuer and answer some security questions to activate the card – this is to help prevent fraud.

What to do with your old card

If you want to cancel your old card, inform the issuer, cut up the card in to at least 6 pieces and shred it and make sure you pay off any outstanding balances.

You might want to keep your old card for a bit if you make any regular payments with it (annual membership fees or subscriptions, say). This will give you time to inform these companies of your new card details.

How to switch credit cards brought to you by LowerMyBills from Experian

The LowerMyBills guide on how to switch credit cards is a step-by-step guide on how to switch credit cards, compare credit cards, apply for credit cards online, and the application process, so that you have the information you need when applying for credit cards online.