Your Credit Card Was Discontinued — What Happens Next?

You do your research, you apply for a credit card, you use it and pay it off regularly —  everything is going according to plan. Then one day out of the blue, you get a notice from your credit card issuer saying they are going to discontinue your specific type of credit card. So what happens now?

Keep reading to learn what discontinued credit cards are, what happens if your credit card is discontinued and what you need to do next.

What are discontinued credit cards? 

So, why exactly do credit card issuers discontinue credit cards? There are a few reasons why credit card issuers choose to discontinue their credit cards. It could be because not enough consumers are applying for that specific credit card and the credit card issuer isn’t making enough money from it. Sometimes the credit card issuer will have plans to release a new version of the credit card that has better features or benefits. In the event a credit card is co-branded (like with an airline or retailer), the partnership may come to an end, which can lead to the discontinuation of the card. There can be many reasons for discontinuation.

What happens if your credit card is discontinued?

If your credit card is discontinued, usually there are a few options for how to proceed and your options will depend on how the credit card issuer chooses to handle the discontinuation. But the good news is that you do have options for how to proceed. 

Sometimes, you can continue to use the credit card even though the credit card issuer won’t allow any new users to apply. In that case, you’ll be able to continue to use the credit card as normal and earn the same rewards until the issuer decides to completely discontinue the card. If you can’t continue to use the card, you’ll likely be presented with the option to switch to a different credit card under the same issuer. This is known as a product change, and you may be able to upgrade to another card without needing to reapply for it. 

You don’t always get a choice in the matter when it comes to switching to a new credit card. The credit card issuer may automatically transition you to a new credit card. 

What should you do next?

Your next steps will depend on which of the previously mentioned paths you choose.

If the credit card issuer allows you to keep using the discontinued credit card, you can keep using it as you normally do and don’t need to take any special action, but you may want to consider researching new credit card options in case the issuer completely discontinues it in the future. 

If you are still allowed to use the credit card, but decide to cancel it, you’ll need to pay off the remaining balance in full and redeem any rewards points, cash back or other cardholder benefits before canceling the credit card.  If the credit card issuer automatically transfers you to a new card they offer, they’ll walk you through what your next steps should be for redeeming your earned rewards from your old card and anything you need to know about using your new one.

What to keep in mind when shopping for a new credit card

Applying for a new credit card is a big responsibility that may impact your credit score, so you want to take your time to do your research about each credit card you’re considering applying for. 

Whether you decide to accept a rollover into a new credit card from the same credit card issuer or want to shop around for a new one, there are a few questions to ask yourself to determine if a new credit card is a good fit for you and your unique financial needs. 

• Does the credit card fit my spending habits? Different credit cards offer different perks and reward structures, some of which can be more favorable for your spending habits. For example, if you’re a homebody who doesn’t often eat out or travel, you won't reap many rewards by using a credit card that gives a high percent of cash back for purchases made at restaurants and with travel partners.

• Is the annual fee worth it? If you’re converted to a credit card with a higher annual fee or are looking at new credit cards with a higher fee than you had before, comparing the benefits of the two cards will help you determine which card's benefits outweigh the cost of the annual fee. Most credit card issuers offer a credit card with no annual fee, so you don’t necessarily need to change issuers. 

• Will your credit score qualify you? All credit cards have credit score requirements for their applicants. Before you apply for a new credit card, make sure you check that the credit card issuer accepts your credit score before applying. Credit card companies run a hard credit inquiry on your credit report (which hurts your credit score) as one way to determine eligibility. If you know your credit score won't qualify for that particular card, there's no point in potentially lowering your credit score for a card you won’t qualify for. You can also apply for preapproval with multiple credit cards so you can get an idea of which cards you’ll qualify for if you apply. Preapprovals lead to a soft credit inquiry instead of a hard one, and no damage will be done to your credit score. 

• Is this the best offer available to me? An important part of shopping around for a new credit card is looking for the best perks, rewards structure and interest rate available to you, as well as any potential fees you might be charged. Compare and contrast the cardholder benefits, what their introductory and ongoing APR is, what the annual fee is and if they charge foreign transaction or late payment fees. 

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