I originally wrote this article back in February 2018. Here’s an update for 2019 with some new guidance based on recent data points.
In this article, we’ll look at the technique of “product switching”, which allows you to earn multiple signup bonuses with one financial institution without incurring additional credit checks, and also helps to improve your credit score and keep it in good health.
What Is Product Switching?
Whenever you put in an application for a new credit card, the lender pulls your credit file and assesses your creditworthiness. That’s known as a “hard pull”, and too many of these inquiries can affect your credit score in the short term, hampering your ability to open even more cards and obtain even more welcome bonuses.
On the other hand, with certain financial institutions, if you already hold a credit card product you’re allowed to “switch” to another product without getting another credit check done. After all, the financial institution isn’t issuing you additional credit – you’re simply transferring your existing credit limit to a different credit card product.
Typically, product switching can only be done over the phone, since applying for a card online would constitute a new credit application (although as you’ll see below, there’s one important exception to this). Customer service representatives of banks that allow product switches are all familiar with the practice and can quite easily help you get it done.
The exact details and procedures vary from bank to bank, but in general, product switches are useful for two reasons:
They allow you to obtain signup bonuses without incurring a credit hit
They allow you to continue extending your average age of accounts (AAoA) on your credit file, since you will be switching away from an existing account rather than closing it
Essentially, a product switch replaces one of your existing credit cards with another, but on your credit file it’s as though nothing happened. Your existing tradeline continues to build up history and contribute to the robustness of your overall credit file, and you get to sidestep the (albeit very minor) credit impact of closing an account and opening up a new one, while in some cases earning a hefty signup bonus as well.
Let’s take a look at the major financial institutions that issue points-earning credit cards and their positions on product switches, to help you maximize your gains. Keep in mind that this information is gathered from anecdotal evidence ("data points") as well as my own experiences. If your experiences vary from those detailed here, as always please do share in the comments.
RBC is probably the most friendly bank among the Big 5 banks of Canada when it comes to product switches, as they make it easy to switch your card online and they are known to award the signup bonuses on product switches as well.
You can freely switch between some decent cards, such as the RBC Avion Visa Infinite, the RBC British Airways Visa Infinite, the RBC WestJet World Elite MasterCard, and the RBC Cathay Pacific Visa Platinum, earning the publicly available signup bonus each time. In fact, I was even encouraged by an RBC banking representative to do exactly this.
You can initiate a product switch easily on your RBC account dashboard via the “Switch a Credit Card” link on the right-hand side.
Then you simply select your existing card and then the card you’d like to switch to, and you’re on your way:
The problem is that RBC credit cards don’t consistently offer first-year fee waivers, so unless you want to pay annual fees for your points, you'll have to get a little creative in your thinking. The first way to get your annual fee waived is via the well-documented "Visa Infinite competitor promotion". Basically, if you hold an RBC Visa Infinite product and you ring them up and tell them you have another Visa Infinite from a competing bank, chances are they'll be willing to waive your annual fee right then and there.
You could also try opening an RBC VIP Banking account, which waives the annual fee on one premium travel credit card. This account costs $30/month, but what you can do is open the bank account, use it to waive your credit card fee, and then close the bank account within 1–2 months. This makes your net outlay in the region of $30-60, rather than $120 or more.
Finally, there have been some data points of RBC offering pro-rated annual fee refunds as well, which can help you offset the annual fee if you were to cancel or switch a card less than one year after obtaining it.
TD is well known for allowing product switches rather generously. In fact, the terms and conditions on their premium travel credit cards, the TD Aeroplan Visa Infinite and the TD First Class Travel Visa Infinite, contain the following verbiage:
In the past, TD pretty much followed this rule to a tee, and allowed people to earn signup bonuses on every new application or product switch if it’s been at least six months since their most recent signup bonus.
However, there have been a few recent data points that TD’s getting a little upset at people pushing the envelope on the six-month rule, and the product-switchers haven’t been receiving the signup bonus as a result. I’d therefore recommend extending the timeline a bit – let’s say 9–12 months between product switches – to be on the safe side.
(Note that, unlike submitting a new credit application, there’s no real harm done when you initiate a product switch and don’t receive the bonus – you’ll just have to wait until next time and hope that your account hasn’t been “flagged” to never receive a product switch signup bonus again.)
Furthermore, the TD All-Inclusive Banking Account comes with a fee waiver on one premium credit card. If you have $5,000 to park in this account (thus waiving the monthly chequing fees), you can successfully flip-flop between the two products without paying any annual fees at all.
This is as close to free as it's gonna get – no annual fees, no credit checks, just (at least) 15,000 Aeroplan points and 20,000 TD points flowing into your account on a regular basis.
You’ll also want to think about how to use up your TD Rewards points before switching from the First Class Travel to the Aeroplan card. There’s been data points that unused TD Rewards points simply get converted to Aeroplan miles at a 4:1 ratio, which may or may not be their optimal usage.
If you find this strategy too aggressive, you can also downgrade your Aeroplan or First Class Travel card to a TD Green Visa (which has no annual fee), and then upgrade back to the premium card sometime later once you’re eligible for the bonus again.
Note that unless you have the TD All-Inclusive Banking Account to waive annual fees, typically TD doesn’t allow you to enjoy first-year fee waivers on product switches, even if it’s part of the current public offer. For example, even though the TD Aeroplan Visa Infinite currently offers a first-year fee waiver, but if you try to switch to it, chances are that you won’t be given the fee waiver (there are few isolated incidences of success, so ultimately your mileage my vary).
CIBC allows product switches, but we've heard mixed reports as to whether they award the signup bonuses when you're switching between cards. Some reports indicate that the bonuses can only be awarded on brand-new applications, while others have reported being able to easily switch to a new card and receive the publicly available offer at the same time (including first-year fee waivers!)
It seems very much dependent on the agent who’s helping you over the phone and how they process the product switch in their system.
In any case, since product switches are always allowed, one surefire way to improve your credit score is to downgrade your oldest CIBC cards to no-fee cards that will help increase the age of your credit file.
Say you've applied for a CIBC Aventura Visa Card for Business and earned the signup bonus on that one. Six months in, downgrade it to something like the CIBC Dividend Visa, and keep it around. You can later try your luck at upgrading the card to another points-earning card and getting a signup bonus there as well.
(In fact, my assistant Rachel recently downgraded her Aventura Visa Infinite to the no-fee Aventura Card, and then upgrade it back to the Aventura Visa Infinite six months later, and was successful in getting the public signup bonus on the upgrade of 15,000 Aventura points + $120 travel credit, thus effectively offsetting the $120 annual fee, all for no additional credit hits.)
Another thing I wanted to say about CIBC is that they're by far the most lenient bank when it comes to receiving annual fee waivers just by asking nicely. On multiple occasions when I've called in to cancel a card, I've been offered my next year free just for keeping the account open. Even if you're submitting a brand-new application on a card with an annual fee, it doesn't hurt to try asking if they'll waive the fee for you on the spot!
The issuing bank behind the Alaska Mileage Plan and Best Western Rewards MasterCards has a peculiar set of rules when it comes to product switching. It would be truly fantastic if we could freely switch between the above MBNA cards and nab the signup bonus each time, but alas that's not the case.
However, MBNA does allow you to downgrade from a premium credit card, such as the Alaska or BW Rewards cards, to one of their basic no-fee cards. (Upgrading is also theoretically possible but almost certainly won't come with a second welcome bonus.)
Combine that with MBNA’s unique policy of allowing you to “split off” existing credit limits to create a new tradeline when you’re originally declined for a credit card application, and you have a winning formula. You can downgrade your Alaska cards to no-fee cards after three months or so, and then keep that credit limit handy in case you need to split your credit limits to get your next Alaska account approved.
You can find more details about this strategy in this post on MBNA Alaska credit card strategies. This is an unconventional use of the product-switching technique, but it does allow you to power through those MBNA Alaska bonuses faster than the traditional six-month cycle.
American Express doesn’t allow product switches in the meaningful sense – each new card has to be accompanied by a new credit application. Just imagine how lucrative it’d be if you could switch from the Business Gold to the Platinum to the Business Platinum and back, all without incurring any credit hits.
The flipside to this is that although American Express takes a hardline stance on product switches, they remain the only issuer to offer a meaningful referral program. For example, consider the Business Platinum and the Business Gold – it wouldn’t be beneficial at all to product-switch between the two even if you could obtain the signup bonus, since you’d be much better off submitting a new application and getting the referral bonus of 25,000 Membership Rewards points on the Business Platinum.
The only situation in which American Express allows product switches is that they will occasionally tempt cardmembers with upgrade offers, say from the Gold Rewards Card to the Platinum Card. These offers are usually accompanied with small MR points bonuses, although my experiences indicate that the offers pale in comparison to the full signup bonuses you'd receive with a new application, so it’s rarely a good idea to take them up.
BMO / Scotiabank
As far as I’m aware, neither BMO nor Scotiabank allow cardholders to obtain signup bonuses on product switches in the meaningful sense. They may allow you to downgrade existing cards to no-fee cards in order to preserve the credit history, but any repeat signup bonuses will need to be obtained through a new credit application.
These two issuers tend to have the weakest bonuses out of the Big 5 banks, though, so there’s not much value being lost there.
Once you've delved deep into the world of cycling through credit card signup bonuses, you begin to look for more advanced ways to maximize your earnings while minimizing your costs (in the form of annual fees and credit inquiries).
Product switching is a key tool in the arsenal of anyone who's looking to travel on points, particularly if you're serious about keeping your credit file in tip-top shape while doing so. In general, you'll have the most success with RBC, TD, and CIBC, so pick up the phone (or log in to your RBC dashboard) and set those switcheroos in motion!