How to switch your credit card

January 17, 2022

January is a time when many people take stock of their finances, and identify where they could potentially save money by switching providers, whether that’s household bills, mobile phone contracts, car insurance or a current account. But did you know you can also switch your credit card? Follow our step by step guide to find out how.

Step 1: Pick a new provider

You might consider switching your credit card provider to get a lower interest rate or to avail of benefits such as discounts on flights or cashback offers. The good news is that with seven credit card providers currently available in Ireland, you have a lot of choice (however, KBC is set to exit the Irish market in the near future). Each of these providers will have different pricing structures for interest charged and late-payment fees. Many credit card providers offer a 0% interest rate for a specified period of time for customers who transfer their outstanding credit card balance from their old card to their new card, this is called a ‘balance transfer offer’.

You can compare credit cards using our credit card Money Tool.

Once you decide which provider is most suitable for your needs, the next step is to apply for a credit card with the new provider.

Step 2: Applying for your new credit card

Once you decide to switch to a new credit card provider you will need to complete a credit card application. If you are an existing customer of the new provider, (e.g. you may already have a current account or savings account with them) you will generally only need to complete the credit card application form. If you are not an existing customer of the new provider, you will need to satisfy their identification requirement by submitting proof of identify and proof of address with your credit card application. A list of acceptable documents for the identification requirements will be available from the credit card provider.

Some providers may have a minimum income requirement for credit cards. This minimum requirement tends to be higher for credit cards that have higher spending limits. When your new credit card application is being reviewed, your income and repayment capacity will be assessed.

Top tip

Be aware that if your income or other personal circumstances have changed you may not be eligible for the same limit that you had with your old provider.

A credit check will also be carried out as part of the application to ensure that you met previous loan/credit card repayments. It is important to be honest with the new provider about previous missed payments that could come up on your credit report to avoid delays in your application. If payments were missed and you have a valid reason as to why, then this can be considered in your application.

Step 3: Balance transfer and close your old credit card

Once your new credit card application has been approved, you will be able to transfer your outstanding credit card balance (if any) to the new card. A balance transfer is a good way to save money on existing credit card debt. A balance transfer can reduce the amount of interest you have to pay, provided that you pay off the outstanding debt before the introductory period is over. This period will vary from provider to provider. You may need to complete a form to facilitate the transfer, or the new credit card provider may do it as part of your application and liaise with your old provider on your behalf.

After your balance transfer is complete, you will still need to close the old credit card. You can do this in person, over the phone or in writing, depending on the provider.

Top tip

Government stamp duty is payable on credit cards each year, typically on 1 April, for the preceding year. If you close your credit card after 1 April you may be liable for that year’s stamp duty. Be sure to check if this fee is outstanding, as your credit card will not close until this is paid and interest will continue to be applied to the balance on your card.

Once the old card is closed you should destroy the credit card securely. Credit card providers that have physical branches will allow you to return your old credit card and they will destroy it for you. If this is not an option, you should cut up the card in three places to ensure that the chip and black strip are destroyed.

Step 4: Make sure any recurring payments are set up on the new credit card

Now that you are up and running with your new credit card, don’t forget to amend your card details for any recurring payments you may have. A recurring payment is similar to a direct debit, but instead of using your bank account details, you give your credit card details. Examples of recurring payments would be streaming sites, waste collection services, gym memberships etc.

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