Does Having a Bank Credit Card at Your Bank Really Make a Difference?

woman looking at her credit card
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    If you’re thinking of applying for a credit card, you may have wondered whether you should apply for one where you bank. The answer? Only for the right reasons. For instance, while completing an application for a credit card with your bank may be easier and more convenient since the bank already has your information on file, that’s not a good reason by itself to apply.

    Options: 10 Credit Cards To Consider for Travel Rewards
    Find Out: Why It’s Still Better To Use Your Credit Card Over Your Debit Card

    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 having a credit card from your bank matters.

    Advantage #1: Special Rewards Tied To the Credit Card

    Unless your bank offers concrete rewards for having a credit card with them — such as a reduced interest rate on the credit card, reduced fees on a checking account or better interest rates on savings or money market accounts — there isn’t much intangible advantage to be had this way,” said Carter Seuthe, CEO, Credit Summit. “This is becoming more and more the case as smaller banks stop offering credit cards altogether; smaller banks being the institutions where it may still be possible for a personal relationship to matter.”

    Get Credit Card Perks

    For example, Bank of America offers Preferred Rewards, which is based on your qualifying combined balances in your Bank of America deposit or Merrill investment accounts. With qualifying combined balances of at least $22,000, you’ll earn Gold status, which will allow you to earn a 25% bonus on purchases made with qualifying Bank of America credit cards. For example, every $1 in cash-back rewards will earn 25% more — or $1.25 cash back.

    See: What Happens When You Get Denied for a Credit Card — And What To Do Next

    Advantage #2: Your Chances of Approval May Be Increased

    “Getting a credit card from your existing bank can be beneficial for various reasons,” said Melanie Pitman, personal finance expert and content specialist at creditcardGenius. “First of all, they likely already have confidence in you since 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 struggle to get approved elsewhere, you’re better off applying for a credit card with your bank because it will consider your whole history and give you a little more leeway. 

    Get Credit Card Perks

    Advantage #3: More Flexibility Regarding Credit Limit Increases or Card Upgrades

    “The established relationship also means that there may be more flexibility with increasing your credit limit or upgrading your card in the future,” said Pitman. “However, you should still look at all options for credit cards that add value to your lifestyle in order to determine how to get the most out of your benefits.”

    Helpful: 13 Credit Cards That Every 30-Something Should Consider

    Does Having a Credit Card With Your Bank Matter When It Comes to Getting a Loan?

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

    Having a Credit Card From Your Bank Can Make a Difference

    When it comes to deciding whether or not you should have a credit card from your current bank, consider the advantages above 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’s important to weigh in on whether a credit card from your bank would provide those benefits or not,” said Julien Brault, CEO of Hardbacon.

    Get Credit Card Perks

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

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    Last updated: Oct. 8, 2021

    About the Author

    Cynthia Measom is a personal finance writer and editor with over 12 years of collective experience. Her articles have been featured in MSN, Aol, Yahoo Finance, INSIDER, Houston Chronicle, The Seattle Times and The Network Journal. She attended the University of Texas at Austin and earned a Bachelor of Arts degree in English.

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