Changing credit cards - what do I do first?

sleepysocks

Hi all,

I have a credit card with a silly interest rate so it's about time I switched! I have an outstanding balance on the card, and I can afford to pay back in full.

Question is: Do I pay back the card in full, cancel it, then apply for the new card? Or, should I transfer the balance to a new card? Is one option more sensible/desirable than the other?

Thank you so much in advance for your help

[Deleted User]

You pay it off, open the new card, keep them both, use them and clear in full each month.

Kim_13

Most balance transfers incur a transfer fee so clearing in full is the desirable option.

Lenders will have to assess your application on the basis of whether you can afford new borrowing in addition to your existing borrowing, so clearing the existing card first and waiting for that to update with the credit reference agencies may boost your chances. Leaving the card open would boost the average age of your accounts, which is considered a positive, though a large amount of available credit can be a negative.

For a new 0% purchases card, see the MSE guide on 0% credit cards: https://www.moneysavingexpert.com/credit-cards/best-0-credit-cards. If as you should you are clearing in full each month, it'll be the perks that you go for, such as the Nectar points.

If you can definitely clear in full each month, the MSE guide to the best Cashback cards may be useful: https://www.moneysavingexpert.com/credit-cards/cashback-credit-cards
The interest would by far outstrip the cashback if you could not clear in full.

Dobbibill

It seems pointless to pay a fee to move the balance if you can pay it off in full.

The interest rate is irrelevant if you pay off in full each and every month.

dresdendave

As suggested by previous respondents, if you pay in full every month the interest rate is meaningless.

Rather than looking for a card with a lower APR, try to get one that has cashback or other perks.