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Managing the credit cards in your wallet is a crucial component of maximizing rewards travel. It requires a careful assessment of each card to decide if the benefits and points earned outweigh any annual fee and to determine whether it aligns with your current travel goals.
And if you've decided that a particular card in your wallet no longer supports those goals, that's okay. But first, consider whether you can downgrade your card instead of outright canceling it. Here's when you should downgrade.
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Reasons to Downgrade or Cancel a Credit Card
You might want to downgrade or cancel a credit card for any number of reasons. These can include:
- A shift in your rewards strategy — focusing on a different loyalty program to achieve a specific travel goal.
- Changes to a rewards program attached to the card — perhaps it no longer aligns with your rewards strategy, like the loss of your favorite transfer partner.
- A reduction of bonus categories, benefits, or the points-earning power of the card — maybe your card is less rewarding or perk-filled than it used to be.
- A change in personal circumstances — a new job or welcoming a new addition to the family.
- The fee outweighs the value you're receiving from the card benefits.
- Moving to a new location — this can necessitate a change of preferred airline, hotel chain, or airport lounge membership.
- A new rewards card entering the market — you might find a different card that aligns more closely with your travel goals and spending habits.
If you decide a card is no longer needed or has been made redundant due to new products entering the market, the next step is to decide whether to cancel it or downgrade it to another product with a lower (or $0) annual fee.
Related: Beginner's Guide to Building a Credit Card Application Strategy
Downgrade a Credit Card vs. Canceling a Credit Card
Deciding the fate of cards that don't make the cut can be tricky, as there are several thing to consider.
You want to ensure that you don't lose any miles and points if you close your card while also making sure you can still use and transfer points and miles in a way that offers a decent return. Perhaps most importantly, you need to consider how closing or downgrading the card will affect your credit score.
Before deciding to downgrade or cancel a credit card, it’s worth calling the credit provider to see if there are any promotions or retention offers available on your card that might convince you to keep it. If the bonus provides enough value, it might make sense to keep it for an additional year.
If there are no promotions or retention offers available for you, there are a few things you'll want to weigh.
Can the card be downgraded?
Some cards, such as the Chase co-branded cards, cannot be downgraded or converted to a card from any other loyalty program or to an Ultimate Rewards-earning card. Additionally, Amex cards that utilize the “Pay Over Time” option (balances may accrue interest charges) cannot be downgraded/swapped to regular credit cards and vice versa, nor can you swap between personal and business credit cards.
How will it affect my credit score?
Downgrading a credit card can ensure the age of your account sticks and keeps the credit line open without any hard pulls; both factors play a role in your credit score.
Will you lose perks or benefits that lower the value of your points/miles?
Downgrading can sometimes reduce the value of the points in your account. For example, if you downgrade from the Chase Sapphire Preferred® Card to the Chase Freedom Flex℠ without having the Ink Business Preferred® Credit Card or Chase Sapphire Reserve®, you cannot transfer Ultimate Rewards to travel partners, and points are only worth 1¢/point through Chase Travel℠.
Will downgrading disqualify you from earning a new cardmember bonus on other cards?
When you downgrade from one card to another, it might make you ineligible to receive a welcome bonus from opening that card. Each issuer has different rules and restrictions you'll need to navigate.
Related: Why You Shouldn't Cancel a Credit Card in the First Year
The Best Credit Card Downgrade Options
If you've settled on downgrading as your best option, which card should you try to get instead? Here are some of the most common options for American Express, Chase, and Citi.
Downgrading American Express Cards
With American Express, you do not receive a prorated annual fee from your Amex card if you cancel more than 30 days after the annual fee posts to your account. The same rule doesn’t apply to downgrading products. When upgrading or downgrading an Amex card, you still receive a prorated fee if it's within 30 days of the fee posting.
If you hold a regular American Express credit card and want to downgrade, the best options are Amex EveryDay® Credit Card or the Blue Cash Everyday® Card from American Express To maintain and continue using a balance of Membership Rewards points, the Amex EveryDay will allow you to continue collecting and transferring Amex Membership Rewards with no annual fee.
If you hold an American Express card that makes use of the “Pay Over Time” option, your options are a bit more limited.
For reference, the Amex business card with the lowest annual fee is the Business Green Rewards Card from American Express, which charges a $95 (Rates & Fees).
Chase product change tips
Many of Chase's cards are co-branded cards attached to hotel and airline loyalty programs like Southwest Rapid Rewards and Marriott Bonvoy. The downside of these cards is that you cannot downgrade or product change them to one that earns Ultimate Rewards or cash back.
However, if there is more than one card within the card family, you can downgrade to one of those cards. For example, you can downgrade the The New United Club℠ Card to the The New United℠ Explorer Card. Just be aware that you won't earn any signup bonus from the new card after downgrading.
The same rule goes for Chase branded cards, which can only be downgraded to another card that earns Ultimate Rewards points.
If you hold the Ink Plus Card, you can downgrade to the Ink Business Cash® Credit Card — a fantastic small business credit card that charges a $0 annual fee. Just note that you might be better off applying for the Ink Cash outright instead of downgrading your account.
- Earn $350 when you spend $3,000 on purchases in the first three months and an additional $400 when you spend $6,000 on purchases in the first six months after account opening
- Earn 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year
- Earn 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year. Earn 1% cash back on all other purchases
- With Zero Liability you won't be held responsible for unauthorized charges made with your card or account information.
- No Annual Fee
- Redeem rewards for cash back, gift cards, travel and more through Chase Ultimate Rewards®.
- 0% introductory APR for 12 months on purchases
- Member FDIC
- Rates & Fees
- 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable and phone services each account anniversary year
- 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year
- 1% cash back on all other card purchases with no limit to the amount you can earn
How To Downgrade the Chase Sapphire Preferred
If you intend to downgrade the Sapphire Preferred, arguably the best option without an annual fee is the Freedom Flex.
The card still earns Ultimate Rewards points with bonus categories that earn up to 5%. However, you need to hold an eligible Chase card — such as the Ink Preferred — to be able to transfer points to Ultimate Rewards travel partners or redeem points for more than a penny apiece through the Chase Travel℠.
The easiest way to downgrade is by calling the customer service number on the back of your card. You can tell the agent the card you want to downgrade to your card of choice. You may be able to process a card downgrade by messaging customer service through your online account. However, your mileage may vary with this method.
When you downgrade the Sapphire Preferred or any other type of Chase card, you'll keep the same credit card number, balance, credit line, and payment due date. Chase will not do a hard pull on your credit since you are keeping your existing account. You'll also keep any Ultimate Rewards you've earned, but — as we mentioned — they won't be as valuable as when you held the Sapphire Preferred.
Note: Chase does not allow cardmembers to hold more than one Sapphire card. Downgrading from a Sapphire card to another card doesn't immediately lift this restriction. We've seen reports the process can take 45 days or more to fully reflect on your account.
Related: Who Is Eligible To Get a Bonus on the Chase Sapphire Preferred® Card
Citi product change tips
Citi will not let you downgrade within the initial 12 months of opening a credit card account. If you downgrade after the fee is applied, they will charge at least part of the annual fee on the card.
There are a couple of options for downgrading Citi cards. The Citi Double Cash® Card is an easy-to-understand 2% cash-back card offering 1% when you buy plus 1% as you pay your statement.
If Citi ThankYou® Points is your preferred method of earning within Citi, the Citi Custom Cash® Card is a $0 annual fee card that allows you to maintain a balance earned on a Citi Strata Premier℠ Card or Citi Prestige® Card (not available to new applicants). However, you cannot transfer points to the full list of travel partners without one of the two premium cards.
Final Thoughts
Before you officially decide whether to cancel or downgrade a card, there are several things you should consider. Most of the time, this isn't just a simple decision!
We highly recommend talking to a customer service representative to see if there are any promotions or bonuses available before heading down either path. It's also worth exploring downgrade options before deciding to cancel a card as cancellations can sometimes adversely affect your credit score.
For rates and fees of the cards mentioned in this post, please visit the following links: Business Green Rewards Card from American Express (Rates & Fees), and Ink Business Cash® Credit Card (Rates & Fees)
The comments on this page are not provided, reviewed, or otherwise approved by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
