When Should I Downgrade a Credit Card? When Should I Downgrade a Credit Card?

When Should I Downgrade a Credit Card?

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Managing the points and miles earning credit cards in your wallet is a crucial component of maximizing rewards travel. It requires a careful assessment of each card to ascertain if the benefits and points earned outweigh the annual fee, and determining if the card lines up with your current travel goals.
Credit Cards

Reasons to Downgrade or Cancel a Credit Card

There is any number of reasons you might want to downgrade or cancel a credit card. These can include:

  • A shift in your rewards strategy i.e. focusing on a different loyalty program to achieve a specific travel goal.
  • Changes to a rewards program attached to the card where it no longer aligns with your rewards strategy, for example, the loss of a transfer partner.
  • A reduction of bonus categories, benefits, or the points earning power of the card.
  • A change in personal circumstances such as 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 which necessitates a change of preferred airline or hotel chain.
  • A new rewards card entering the market 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 deciding whether to cancel the card or downgrade it to another product that doesn’t attract an annual fee.

Related: A Beginner's Guide to Credit Card Application Rules

Downgrade a Credit Card vs. Canceling a Credit Card

Deciding the fate of card's that don't make the cut can be a tricky business, as there are several ingredients to factor in.

You want to ensure that any points earned on the account don’t get wiped out from making the wrong call, that you can still use and transfer points and miles in a way that offers a decent return, and perhaps the most important, 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 available on your card that might convince you to keep it. If the bonus provides enough value, it might make sense to hang onto it in the meantime.

If there are no promotions available, there are a few things to consider.

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 it also 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, Ink Plus® Business Credit Card, or Chase Sapphire Reserve®, you cannot transfer Ultimate Rewards to travel partners, and points are worth 1¢/point in the Chase Travel Portal.

Downgrading to a no-fee product may disqualify you from earning a new cardmember bonus. When downgrading from a premium card to a no annual fee card, you forgo any bonus you may otherwise receive if the card was considered a new product.

The Best Credit Card Downgrade Options

Downgrading American Express Cards

As of September 1, 2016, you will no longer receive a prorated fee from Amex cards when canceling outside of 30-days of the charge posting 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 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

If you want to maintain and use a balance of Membership Rewards points, the Amex EveryDay will allow you to continue collecting and transferring Membership Rewards.

If you hold an American Express card that makes use of the ‘Pay Over Time' option, your options are a bit more limited. The Amex business card with the lowest annual fee is the Business Green Rewards Card from American Express which charges a $0 introductory annual fee for the first year, then $95.

Downgrading Chase Cards

A lot of the cards offered by Chase are co-branded cards attached to hotel and airline loyalty programs like Southwest Rapid Rewards and IHG Rewards Club. The downside to these cards is you cannot downgrade or product change a co-branded card to one that earns Ultimate Rewards or even to a cashback card.

Although you can downgrade within a co-branded program if there is more than one card such as downgrading the United Club℠ Infinite Card to the United℠ Explorer Card. Just be aware that by downgrading, you will miss out on any signup bonus the card is running at that time.

The same goes for Chase branded cards, which can only be downgraded to another card from within the UR points earning family of cards.

If you intend to downgrade the Sapphire Preferred, an option without an annual fee is the Chase Freedom Flex℠. The card still earns Ultimate Rewards points with bonus categories that earn up to 5%, but you need to hold the Sapphire Reserve, Sapphire Preferred, Ink Plus Card, or the new Ink Preferred to transfer points to travel partners, or redeem points for more than a penny apiece in the Chase Travel Portal.

If you hold the Ink Plus Card, you can downgrade to the Ink Business Cash® Credit Card which is a fantastic small business credit card that charges $0 in annual fees.

Note: Chase no longer allows cardmembers to hold more than one Sapphire card. Downgrading from a Sapphire card to something else doesn't change your eligibility right away. We've seen reports the process can take 45 days or more.

Downgrading Citi Cards

Citi will not let you downgrade inside the initial 12 months of opening a credit card account, and they will charge at least part of the annual fee on the card if you are downgrading after the fee is applied.

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% on purchase and 1% when the statement is paid.

If Citi ThankYou Points is your preferred method of earning within Citi, the Citi ThankYou® Preferred Card is a $0 annual fee card that allows you to maintain a balance earned on a Citi Premier® Card or Citi Prestige® Card, although you cannot transfer points to travel partners without one of the two premium cards.

Final Thoughts

There are many factors that need to be considered before you decide whether to downgrade or cancel a card.

We highly recommend talking to a rep to see if there are any promotions or bonuses available before heading down either path. It's also worth exploring downgrade options before making the decision to cancel a card as cancellations can sometimes have an adverse effect on your credit score.

If you have any questions, please don’t hesitate to reach out. We would love to hear from you and if there is anything we’ve missed, let us know in the comments!

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  • I just read a different article which gave me another thing to consider when looking to downgrade a Citi premier card (which I recently did but now regret!). It said after earning a sign on bonus for the Premier, you have to wait 24 months to be eligible to earn another sign on bonus for the same card…BUT, if you downgrade that resets the clock and you have to wait another 24 months to again be eligible for the bonus on a new Premier.
    I was very close to 24 months and wanted to avoid the annual fee, but I would have been better off to pay it, wait a bit longer and apply for a second Premier to get the bonus, and THEN downgrade the first one ?
    The 60K bonus would have been more than enough for the 3 of us to fly round trip to Hawaii when transferred to Turkish Airlines points and redeemed on partner United, well worth 2 annual fees!

    • Ughh! That’s really frustrating. I’m finding myself in a similar situation now, so I’ve been looking into this. The policy seems to be that if you got a new card number, it counts as an account close/open and resets the clock. If Citi keeps your old number, I understand that the downgrade does NOT reset the 24-month clock.

      What card did you downgrade to?

  • Good overview of the options, but didn’t really explain when the best time is to downgrade a card…I’m assuming shortly after the AF hits?

  • This post was very informative and one that I’ll be referring to when I look to cancel or downgrade some cards in the near future. Thank you!

  • Interesting article. New to rewards cards & recently approved for CSR. Like the perks, but can see how the fee may become cumbersome if I don’t travel enough. Appreciate the recommendations for maintaining the UR points. Are there posts about how best to determine whether the fees or perks are paying off?

    • Frank, we provide some insight on how to look at the value, but you need to individually look at what you’re paying to see if it makes sense for your specific case. For example, if the only benefit you receive from a card is lounge access but you never use the lounge, it sounds like it is not paying off.

  • I had the Delta gold Amex card and received 50,000 bonus miles for reaching a certain spending threshold within 3 months. After a year’s time I noticed that I was charged the annual fee. I was then able to cancel the card within the 30 day window and get a full refund. I was offered the option of signing up for the no-fee Amex EveryDay card and got another 10,000 miles after reaching an easy spending requirement. I hope my FICO score is not affected by cancelling and signing up for the new card, but I was able to get a total of 60,000 miles with no fee.

  • Recently was looking to downgrade my CSP to a regular sapphire, but instead went to a Freedom, which has much more UR earning potential.

  • This is good avise. Probably the most important yet not so highlighted tip is to _attempt_ to downgrade them. Most companies (and not just credit card) will prefer to offer a promotion rather than losing a customer. So once you investigated a little bit about the options (the next steps below), you have the tools to make the call with some arguments to negotiate!

  • Timely article for me: recently approved for the Reserve and have been debating how to proceed with the Preferred.

  • I’ve had the Amex Green since forever. I also have Amex Hilton, Everyday Preferred, and Platinum. I’m trying to figure out what to do with Green Card as the age is good for my credit score, but I don’t like the Membership Rewards earning rates. Should I upgrade Green to Gold? Does that mean I lose any chance of promo MR for Gold? Should I apply for Gold first to get Promo MR and then deal with doing something with Green?

    • Frank, I’d call up Amex and tell them this exact story and ask what your options are for converting the card product. This is a perfect scenario for Amex to do the right thing. Upgrading in place would preclude you from a future bonus on that updated card.

  • Thank you so much for the advice! Question on Citi Double Cash cards – can you possess more than one Double Cash card at the same time (I already have one, but may want to downgrade one other Citi card)? Thanks!

    • Bill, I don’t personally know if you can — however, not sure why you’d want to do this. Perhaps look to convert to another product like the ThankYou Preferred? Are you looking to keep the account open from an aging perspective or just keep the line of credit available?

  • If I downgrade my Chase Ink Plus to the Chase Ink Cash, does it still earn 5 points per dollar on Office supplies, or is it a 3 point deal when I downgrade?

  • Can I downgrade my Ink Plus to Ink Cash and still be able to transfer points to my Sapphire Reserve?

    What’s the downside to downgrading Ink Plus to Ink Cash?

    • Yes, you can do that conversion and then consolidate points. As for the downside, when paired with the Sapphire Reserve I haven’t found one yet. I guess if you’re spending more than $25,000 at 5x earning categories you’ll lose a bit as the Ink Plus rewards you at 5x on up to $50,000/year, whereas the Ink Cash is only up to $25,000/year.

  • But at one has to watch their total credit line with Citi. At some point the credit risk would be too high, unless you ask them to reduce credit with individual cards.

  • Don’t forget about the CIti Costco Anywhere card, for those of you with Costco memberships.

  • I should probably downgrade my Barclays as they did away with miles for revenue [test]

  • Thanks for explaining the issues to consider. I guess I’m stuck with some branded credit cards, but might downgrade others in lieu of cancellation.

  • The Amex Fidelity card is another good option… Unlimited 2℅ cash back, no annual fee.

  • Will Citi let you downgrade their Premier to their Prefered without many issues? Never dealt with a card with annual fee and would just like to know I have the option to downgrade (or upgrade) depending on how life happens?

  • As a UK credit card holder, I always downgrade the £195 BA credit card to the free one when I’ve earned the Companion Voucher.

    • GnarlyOldGoatDude says:

      That’s a wise idea. My wife has two vouchers. I doubt we will ever use them. Might as well downgrade now.
      And now to consider the £450 Amex Plat fee.