Every time banks like American Express or airlines like Delta come out with bigger bonuses on credit cards, the same question piles up: Should I upgrade my card? Or apply for a new one?
Upgrade offers on travel credit cards are a dime a dozen. Delta, in particular, tries to get cardholders to upgrade from a Delta Gold® SkyMiles American Express Card to the Delta Platinum® SkyMiles American Express Card, for example. But does it make sense?
Not always. In fact, it may not make much sense at all. But to make the right decision, you should understand the rules and restrictions around upgrades and new credit card applications.
Here’s what you need to know to make the right choice when considering a Delta card upgrade – or not.
The Basics of American Express Credit Card Applications Rules
Let’s go back to basics.
Every bank sets its own rules and restrictions around credit card applications. Chase has the dreaded 5/24 rule, which bars you from getting approved for a new Chase credit card if you’ve opened five or more cards in a 24 month period from any bank – not just Chase.
American Express doesn’t have that same rule, so you don’t need to worry about it when it comes to Delta’s co-branded credit cards. Rather, per the terms of Amex’s card applications:
“Welcome offer not available to applicants who have or have had this or previous versions of this Card. We may also consider the number of American Express Cards you have opened and closed as well as other factors in making a decision on your welcome offer eligibility.”
Essentially that means if you have had a specific American Express card in the past, you will not be eligible to earn the bonus on the card. Generally speaking with American Express, this restriction will follow you for about seven years after you close the card. At that point, data suggests that Amex allows you to apply for that card again and be eligible to earn the welcome offer bonus.
So while Amex isn’t looking at your credit card history with other banks, they will factor in which Amex cards you have had previously … regardless of whether or not you earned the welcome offer bonus on them.
You’ll need to keep that in mind when it comes time to decide on a possible upgrade.
Why You Maybe Shouldn’t Upgrade a Delta Card
When Delta and American Express increase the welcome offer bonuses on the cards, they are clearly looking to get new cardholders in the door. But they’re also shelling existing cardholders with offers to upgrade to a higher-tier card, too.
Should you take them up on an offer? It’s almost always a bad idea. Taking that upgrade will make you ineligible for earning a big welcome bonus offer on the same card later on.
Let’s say you’ve got the Delta Gold SkyMiles American Express Card and get an offer via email to upgrade that card to the Delta Platinum SkyMiles American Express Card. More often than not, these upgrade offers pale in comparison to the elevated bonuses we often see on the suite of co-branded Delta credit cards.
And because of the way Amex’s application rules work, even if you have the Delta Gold Card, you would still be eligible to apply for the outright Delta Platinum card and earn the full welcome offer bonus – as long as you haven’t earned the bonus on that card previously.
Upgrade instead, and you won’t be able to get a big welcome bonus on that card in the future. So while Amex will often present you with an offer to upgrade to a more superior card, that offer will almost never be as good as the offer to apply for the card as a new account.
That said, Amex and Delta have started to turn this on its head recently with some very strong upgrade offers – stronger than we’ve ever seen, in fact.
What About Downgrading Your Card?
This same logic applies when you are downgrading an American Express credit card, including from Delta.
Have a Platinum SkyMiles Card? By downgrading to the Gold Card, for example, you wouldn’t be able to earn the bonus SkyMiles that card is currently offering.
Again, you could just apply for the Gold card outright, and then close your Platinum card if you’d like. This would accomplish your goal of moving to a cheaper card fee while also allowing you to earn points or miles in the process.
Consider Your Credit Score
One thing that you will need to consider when going this route is that applying for a new credit card outright (as opposed to upgrading or downgrading an existing account) will result in a hard credit pull.
And that’s not necessarily a bad thing. While your credit might take a temporary 5-10 point hit, your score will ultimately go up if you use that new line of credit responsibly.
When you upgrade or downgrade an account, it’s different: banks call it a product conversion. Essentially, you are just moving an existing line of credit to a different credit card product from that bank. From the bank’s perspective, it isn’t a new line of credit at all – and thus they do not need to pull your credit score again.
Of course, the trade-off here is that you either won’t earn any points or miles, or much fewer than you could by just applying for the card outright as a new account.
It depends on what bonuses are available and your own personal situation. But nine times out of 10, you’ll be better off applying for a new Delta card rather than upgrading (or downgrading) your current Delta card.
You’ll earn more miles that way. And remember, by upgrading or downgrading, you make yourself ineligible to earn a big welcome bonus on that card down the line.