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Credit Cards

How to know when it's time to upgrade your starter credit card

Select spoke with an expert about when cardholders should move on from their first credit card.

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When you get your first credit card, you're probably not getting a card with the most lucrative welcome bonus or the highest rewards categories. Your card might be a secured credit card, which requires you to put down a deposit that acts like collateral, or a card that's just for college students.

While these cards are a great way to start building your credit history, you will likely reach a point where you want to upgrade. 

People should move on from their first card when they've gotten in the habit of paying off their monthly balances on time and in full, says Roger Ma, a certified financial planner at lifelaidout® and author of "Work Your Money, Not Your Life.

Once you know how to be a responsible credit card user, it could be time to get a new card, especially if you have a better credit score than you did when you opened your first card. Here are a few things to consider before you take the plunge.

Can you upgrade your starter card?

If you have a secured card, you may have the ability to easily upgrade after a few months of responsible usage. The Discover it® Secured Credit Card, for example, offers a clear path to getting an upgrade. Starting at seven months from account opening, Discover will automatically review your credit card account to see if you can transition to an unsecured line of credit and return your deposit.

While the Discover it Secured Credit Card does offer cardholders 2% cash back at gas stations and restaurants, on up to $1,000 each quarter, and 1% on all other eligible purchases, it might not be a great option for you if you want more rewards or need a higher credit limit.

Discover it® Secured Credit Card

On Discover's secure site
  • Rewards

    Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.

  • Welcome bonus

    Discover will match all the cash back you've earned at the end of your first year

  • Annual fee

    $0

  • Intro APR

    N/A on purchases

  • Regular APR

    25.99% Variable

  • Balance transfer fee

    3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*

  • Foreign transaction fee

    None

  • Credit needed

    New / Rebuilding

*See rates and fees, terms apply.

Should you close your first credit card when you open a new one?

You shouldn't close your first credit card because the length of your credit history makes up 15% of your FICO credit score, and it's affected by three factors: the average age of your accounts, the age of your oldest account and how long it's been since you opened an account. 

If you close your account, you'll negatively impact the average age of your accounts and the age of your oldest account and undo some of the positive work you did opening a card in the first place.

Ma recommends that if you plan on keeping your card open, you should periodically monitor it to make sure there is no unauthorized spending. You'll also want to make sure you use it from time to time, otherwise the issuer could close it due to inactivity.

What kind of card should you open next?

When you're choosing a new card to add to your wallet, you should consider the welcome bonus, the annual fee, the foreign transaction fees, your credit score and whether your spending habits align with the card's rewards categories. 

"If your spending is spread evenly across categories, it may make sense to look for a rewards card that gives you a high cash-back percentage for all spending," says Ma. 

For a card with a flat cash-rewards rate, you could choose the Wells Fargo Active Cash® Card which offers 2% cash rewards on all eligible purchases and no annual fee. (Read our full review of the Wells Fargo Active Cash Card.)

Wells Fargo Active Cash® Card

On Wells Fargo's secure site
  • Rewards

    Unlimited 2% cash rewards on purchases

  • Welcome bonus

    Earn a $200 cash rewards bonus after spending $1,000 in purchases in the first 3 months

  • Annual fee

    $0

  • Intro APR

    0% intro APR for 15 months from account opening on purchases and qualifying balance transfers; balance transfers made within 120 days qualify for the intro rate

  • Regular APR

    17.99%, 22.99%, or 27.99% variable APR on purchases and balance transfers

  • Balance transfer fee

    Introductory fee of 3% ($5 minimum) for 120 days from account opening, then up to 5% ($5 minimum)

  • Foreign transaction fee

    3%

  • Credit needed

    Excellent/Good

See rates and fees, terms apply.

Another popular flat-rate cash-back card is the Chase Freedom Unlimited® Card, which offers 5% cash back on travel purchased through Chase Ultimate Rewards®, 3% on dining at restaurants (including takeout and eligible delivery services) and drugstores and 1.5% on all other purchases. Cardholders earn an extra 1.5% on everything they buy on up to $20,000 spent in the first year.

Chase Freedom Unlimited®

On Chase's secure site
  • Rewards

    Enjoy 5% cash back on travel purchased through Chase Ultimate Rewards®, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases

  • Welcome bonus

    Earn an extra 1.5% on everything you buy (on up to $20,000 spent in the first year) - worth up to $300 cash back. That's 6.5% on travel purchased through Chase Ultimate Rewards®, 4.5% on dining and drugstores, and 3% on all other purchases.

  • Annual fee

    $0

  • Intro APR

    0% for the first 15 months from account opening on purchases and balance transfers

  • Regular APR

    17.24% - 25.99% variable

  • Balance transfer fee

    Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that, either $5 or 5% of the amount of each transfer, whichever is greater.

  • Foreign transaction fee

    3%

  • Credit needed

    Excellent/Good

Terms apply.

Lastly, if your spending is more concentrated in a few areas, you might want to opt for a card with either rotating categories or higher rewards rates in those categories. 

The Chase Freedom Flex℠ gives 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate (then 1%) (see the full 5% cash-back calendar here), 5% cash back on travel booked through the Chase Ultimate Rewards®, 3% cash back on dining at restaurants (including takeout and eligible delivery services) and at drug stores, and 1% cash back on all other purchases.

Chase Freedom Flex℠

On Chase's secure site
  • Rewards

    5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate (then 1%), 5% cash back on travel booked through the Chase Ultimate Rewards®, 3% on drugstore purchases and on dining (including takeout and eligible delivery services), 1% cash back on all other purchases

  • Welcome bonus

    $200 cash back after you spend $500 on purchases in your first three months from account opening

  • Annual fee

    $0

  • Intro APR

    0% for the first 15 months from account opening on purchases and balance transfers

  • Regular APR

    17.24% - 25.99% variable

  • Balance transfer fee

    Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that, either $5 or 5% of the amount of each transfer, whichever is greater.

  • Foreign transaction fee

    3%

  • Credit needed

    Excellent/Good

Terms apply.

If you're a foodie who attends concerts or events regularly, you could opt for the Capital One SavorOne Cash Rewards Credit Card. You'll get 3% cash back on dining and entertainment, 3% on eligible streaming services, 3% at grocery stores (excluding superstores like Walmart® and Target®) and 1% on all other purchases.

Capital One SavorOne Cash Rewards Credit Card

Information about the Capital One SavorOne Cash Rewards Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.
  • Rewards

    3% cash back on dining and entertainment, 3% on eligible streaming services, 3% at grocery stores (excluding superstores like Walmart® and Target®) and 1% on all other purchases

  • Welcome bonus

    Earn a one-time $200 cash bonus after you spend $500 on purchases within the first 3 months from account opening

  • Annual fee

    $0

  • Intro APR

    0% intro APR on purchases and balance transfers for 15 months

  • Regular APR

    17.99% - 27.99% variable 

  • Balance transfer fee

    3% fee on the amounts transferred within the first 15 months

  • Foreign transaction fee

    None

  • Credit needed

    Excellent/Good

Terms apply.

Bottom line

Moving on from your first credit card can open up a lot of opportunities for cardholders: You'll likely be eligible for a card with a more generous welcome bonus and better rewards if you've been diligent with making your card payments on time and in full with your starter card.

For rates and fees for the Discover it® Secured Credit Card, click here

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
Plenty of rewards and benefits including 4X points per dollar for dining at restaurants worldwide