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When to open a credit card with your bank — and when to look elsewhere

Yahoo Personal Finance· Getty Images
Kendall Little
·Senior writer, credit cards
10 min read

Sorting out personal finances is never easy. So if the bank you chose for your savings account or mortgage loan already serves you well, why not use it for your credit card account?

While you can open a card with your existing bank, that’s not your only option — and it may not be the best.

When you open a new credit card — whether you want to earn travel rewards, score a great 0% APR offer, or simply build credit — it pays to explore all available options, not just those from your current bank.

In short, no. You don’t have to be an existing customer with a bank to open a credit card there. Widening your search to banks you don’t already have a relationship with may even lead you to more rewarding offers. Here are some things to consider as you weigh all the options.

Applying for a credit card with your bank can make the process easier. The financial institution you bank with will already have your information available, and you may be able to quickly apply through your online account or in-person with a bank teller.

Even after approval, having both your credit card and other accounts at the same bank may simplify your banking. You can easily transfer money from your checking or savings account to pay off your bill, and view multiple accounts within the same mobile app.

Some banks offer special loyalty deals for credit cardholders who are existing bank customers.

For example, existing Bank of America Preferred Rewards customers with eligible deposit account balances or Merrill investing accounts can earn up to 25% to 75% more each year in rewards with select Bank of America cards.

Let’s say you open a Bank of America® Unlimited Cash Rewards Credit Card, which earns a flat 1.5% cash back on every purchase. If you spend about $1,200 monthly on the card (a total of $14,400 annually), you could earn $216 cash back over the year. But if you’re also eligible for the highest Preferred Rewards tier, you could increase those rewards by 75%, for an annual rewards total of $378.

Nearly everyone can benefit from a broader credit card search. Limiting yourself to a single issuer makes it much more difficult to find the card that best fits your goals, budget, and regular spending.

Maybe you bank with a small, regional bank in your community because you like the interest rates they offer on savings and the option to visit in-person — but it only offers one credit card option with no rewards.

You’ve had this credit card for a while, and it’s helped you build a great credit score. But now, you're looking for an opportunity to save money with rewards on your spending. In this scenario, it makes sense to look beyond your bank at other issuers. Here are a couple of our favorites:

Chase Sapphire Preferred® Card: For a $95 annual fee, you can earn points toward future travel on the purchases you make with a Chase Sapphire Preferred. It has a welcome offer of 60,000 bonus points after spending $4,000 within the first three months, and you’ll get a 25% boost on your Chase Ultimate Rewards points value when you redeem through Chase Travel.

As for ongoing rewards, earn 5x points on travel purchases through Chase Travel (not including annual hotel bookings that qualify for your $50 annual hotel credit) and 2x points on other travel. Plus, get 3x points on select streaming services, dining out, and online grocery purchases (not including Target, Walmart, and wholesale clubs like Costco); and 1x points on all other purchases.

Blue Cash Everyday® Card from American Express: The Blue Cash Everyday is a no annual fee rewards credit card option that earns cash-back (see rates and fees). You’ll start with a $200 statement credit after spending $2,000 within the first six months.

Then, you can earn 3% cash back at U.S. supermarkets, on U.S. online retail purchases, and at U.S. gas stations — each up to the first $6,000 you spend each year. Also earn 1% cash back on every other purchase. In addition to rewards, the Blue Cash Everyday offers a 0% introductory APR for both new purchases and balance transfers.

Similarly, maybe you opened a checking account and took out a mortgage loan with a large, national bank chain because it was convenient to access branches from anywhere. You’ve taken on some debt over the past few months and want to pay down your balances with a balance transfer — but your bank doesn’t have any current 0% APR offers.

With balance transfers in particular, keep in mind potential restrictions may apply. Many banks don’t allow you to use their balance transfer cards to pay down your existing loan. In other words, if you have a balance on a Chase card that you want to pay off using a balance transfer offer, you’ll probably need to look for a balance transfer credit card from another issuer — Discover, American Express, Bank of America, etc. — to do so.

In the situation above, choosing a dedicated balance transfer credit card from another issuer is likely the best option. Here are some cards with competitive 0% APR balance transfer offers today:

Capital One Quicksilver Cash Rewards Credit Card: The Quicksilver Card from Capital One may be primarily a cash-back credit card, but it also has a solid 0% intro APR offer for cardholders looking to pay down debt. After you’re approved, you’ll have 15 months of 0% APR on both new purchases and balance transfers (19.99%-29.99% variable APR after that; there’s also a 3% balance transfer fee if you make your transfer within the first 15 months).

After the intro period ends, you can still earn cash-back rewards on your Quicksilver Card spending: 5% on hotels and rental cars booked through Capital One Travel and 1.5% flat cash back on everything else.

Chase Freedom Unlimited®: Chase Freedom Unlimited is another cash rewards credit card with a competitive introductory 0% APR. The 0% APR offer lasts for 15 months and applies to both new purchases and balance transfers with a balance transfer fee of 3% or $5, whichever is greater ( your ongoing APR is a variable 20.49%-29.24% after that).

That’s in addition to the Freedom Unlimited’s cash rewards, which include 5% cash back on travel through Chase Travel, 3% cash back on dining and at drugstores, and 1.5% cash back on everything else. Over the first year you’ll earn an extra 1.5% cash back on everything, up to the first $20,000 you spend — for a potential $300 in added rewards.

No matter which issuer you choose, here are a few things to think about when searching for the best credit card to add to your wallet.

The annual fee is the cost you’ll pay to own your card year after year. While many credit cards have no annual fee, some of the highest-value rewards and travel cards can carry annual fees upwards of $100.

Always compare the annual fee to the potential value you expect to get from the card. If you’re not going to earn enough in rewards to make up the fee cost — especially after any first-year bonus or limited-time benefits — it may not be the right card for you.

As a short-term benefit, a credit card welcome offer can put a lot of money back into your pocket.

To start, you should compare welcome offers to make sure you’re earning a competitive bonus. Many no annual fee cash-back credit cards, for example, will offer $150-$200 cash back when you spend at least $500 within the first three months. Rewards cards with annual fees around $100, on the other hand, may offer 50,000 points or more after you spend $3,000 to $4,000 within the first three months.

With those required spending totals, you’ll also want to make sure that the amount required is within your budget over the given time period. You don’t want to risk taking on debt just to earn a welcome bonus.

In addition to cash or points welcome offers, many credit cards also have 0% introductory APRs on new purchases, balance transfers, or both. If you’re planning to make a large purchase with your new card and want time to pay it down interest-free, look for 0% APR on new purchases. If you have existing debt that you want to pay down without taking on more interest, look for 0% APR for balance transfers.

By nature, these introductory offers don’t last forever. You should also know your card’s ongoing interest rate when you apply. Credit card APRs are notoriously high, so don’t be surprised if the range is upwards of 20% APR. It’s good to know what you can pay in interest charges, but even better to avoid them altogether by paying your balance off in full each month.

Credit cards shouldn’t only be valuable in the first year, which is why looking at all the ongoing rewards and benefits are important.

For rewards credit cards with cash back, points, or miles rewards, make sure the bonus categories align with your regular spending. If you rarely go on vacations that require air travel, for example, you probably don’t want to choose a card with airfare as the highest-earning rewards category.

Most cards have at least a few everyday bonus categories, too. Compare these to find the card that works with your regular budget. For instance, you may choose a card with grocery rewards over restaurant rewards if you prefer cooking at home. Or, you might opt for a card with rewards on public transit instead of gas station rewards if you live in a city without a car.

They may not be as exciting as rewards and benefits, but credit card details that help you build credit and protect you from fraud are some of the most important reasons to use a credit card.

On any potential credit card issuer’s site, look for details about reporting your payments to credit bureaus and how you can access your credit score through your online account. You may also have access to credit monitoring and insights to help you keep track of your credit-building journey. This can be especially important if you’re opening a card for the first time and want to use it to build a great credit score.

Finally, credit cards should offer protections against fraud and theft on the purchases you make. This may include zero-liability protection to ensure you’re not responsible for unauthorized transactions, automatic notices of unusual card activity, and more. Some cards even offer purchase protection against damage or theft and extended warranties for eligible spending.

The offers on this page are from advertisers who pay us. That may influence which products we write about, but it does not affect what we write about them. Here's an explanation of how we make money.