Does having a bank credit card in your bank really make a difference?


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If you are thinking about applying for a credit card, you might have wondered whether you should apply for it at your bank. The answer? Only for the right reasons. For example, while completing a credit card application with your bank might be easier and more convenient since the bank already has your information on file, that in itself is not a good reason to apply.

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Instead, it’s important to find a credit card that offers you the best rates, terms, and benefits for your financial situation, which may or may not be offered by your current bank. Here are some advantages to consider when it comes to whether or not to have a credit card from your bank.

Benefit # 1: Special Credit Card Rewards

Unless your bank offers concrete rewards for having a credit card with it – like a reduced interest rate on the credit card, reduced fees on a checking account, or better interest rates on accounts savings or money market – there’s not much intangible benefit to being done this way, ”said Carter Seuthe, CEO of Credit Summit. “This is increasingly becoming the case as small banks stop offering credit cards altogether; small banks being the institutions where it may still be possible for a personal relationship to matter. “

For example, Bank of America offers preferred rewards, which are based on your combined eligible balances in your Bank of America deposit or Merrill investment accounts. With qualifying combined balances of at least $ 22,000, you will achieve Gold status, which will earn you a 25% bonus on purchases made with qualifying Bank of America credit cards. For example, every dollar in cash back will earn 25% more, or $ 1.25 in cash back.

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Benefit # 2: Your Chances Of Approval Can Be Increased

“Getting a credit card from your existing bank can be beneficial for a variety of reasons,” said Melanie Pitman, personal finance expert and content specialist at creditcardGenius. “First of all, they probably already trust you because there is an established relationship, so your chances of approval are increased.”

John Li, co-founder and CTO of Fig Loans, agrees. He said if you think you’ll have a hard time getting approved elsewhere, you’d better apply for a credit card from your bank as this will take your entire history into account and give you a little more leeway. .

Benefit # 3: More flexibility regarding credit limit increases or card upgrades

“The relationship established also means that there may be more flexibility to increase your credit limit or upgrade your card in the future,” Pitman said. “However, you should still consider all of the credit card options that add value to your lifestyle to determine how to get the most of your benefits.”

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Is having a credit card with your bank important to getting a loan?

Building a good relationship with your bank is essential, but having their credit card won’t help you when it comes to getting a big loan from them, ”Li said.“ For that, they will want to see your entire income, expenses and credit history, which will include your credit card data, no it doesn’t matter where you got it.

Having a credit card from your bank can make all the difference

When it comes to deciding whether or not you should have a credit card from your current bank, consider the above benefits and also whether the card is the best choice for you. “Ultimately, you want to choose a credit card that would benefit your lifestyle, so it is important to determine whether a credit card from your bank would offer these advantages or not, ”said Julien Brault, CEO of Hardbacon.

However, if you are trying to build or replenish your credit and cannot get approved elsewhere, applying for a credit card from your bank could help you get approved and on your way to better credit, which can ultimately help you get approved for other financial products in the future, such as loans, no matter where you are applying.

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Last updated: October 8, 2021

This article originally appeared on Does having a bank credit card in your bank really make a difference?

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