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Credit card companies often send out upgrade offers to their cardholders. On the surface, these offers look like a good deal. You can upgrade to a credit card with more features than the one you currently have. And since there's no credit check involved, you don't need to worry about getting declined or denting your credit score.
While they have their benefits, upgrade offers aren't as helpful as you might think. Here's why -- upgrading typically won't get you that new card's introductory offers.
If the card you're upgrading to has a great sign-up bonus or a 0% intro APR, you likely won't be eligible. Those offers are for new cardholders, not existing cardholders who decided to upgrade. That could mean you miss out on quite a bit of value when you upgrade a credit card.
How a credit card upgrade can cost you
Introductory offers are some of the best perks credit cards have. The two most common types of introductory offers are sign-up bonuses and 0% intro APRs. Both can save you money in different ways.
A sign-up bonus is an incentive to open a credit card. After you complete the bonus requirements, you'll earn a set amount of cash back or points. You'll usually need to spend a certain amount in a certain amount of time to qualify. Some of the most valuable sign-up bonuses can be worth $500 or more. Even smaller bonuses can get you at least $150.
A 0% intro APR means the card issuer won't charge you any interest for the introductory period. Some credit cards offer a 0% intro APR on purchases. Others offer a 0% intro APR on balance transfers. That means you can transfer debt to the card and pay it off without incurring more interest charges. Some credit cards offer a 0% APR on both purchases and balance transfers.
You can easily save hundreds of dollars with a 0% intro APR, depending on how you use it. You could charge a big purchase and pay it off over time. And if you have debt, you could refinance it with a balance transfer card.
Exceptions to the rule
Credit card upgrades usually don't include the new card's introductory offers, but there are exceptions.
A card issuer may send you an upgrade offer that includes the new card's introductory bonuses. Or, you might be successful if you call and ask for an upgrade with those offers included.
It's not something you should expect, because it doesn't happen often. But it is possible. If you'd like to upgrade your credit card, it's worth inquiring to see if you can do that and get any special offers that normally come with the new card.
Should you accept an upgrade offer?
Let's say a card issuer offered to upgrade one of your credit cards. Assuming you're interested in upgrading, here's how to figure out if it's a good deal.
First, check whether the upgrade offer includes that new card's introductory bonuses. If so, then upgrading is the best option. You'll get the card you want with all its perks, without needing to apply.
If not, look at what kind of benefits you'd miss out on by upgrading. A 0% intro APR is valuable, but only if you plan to use it. You could still upgrade if you don't need a zero-interest offer.
Finally, if you won't get a sign-up bonus from an upgrade, you should apply for the card outright. There are so many ways you can make the most of sign-up bonuses, it doesn't make sense to give one up by upgrading.
