If your card is discontinued and changes to another card, you will NOT earn a sign-up bonus on the new card. And there are a few things to consider before you cancel it!
Million Mile Secrets reader, Jesse, commented:
I had the Chase Fairmont card, which converted to the Chase Sapphire Preferred on August 15, 2017. I did not already have a Sapphire Preferred card. In this case, do you recommend cancelling the Fairmont card, so I can apply as a new cardholder and earn the 50,000-point sign-up bonus?
So for reader Jesse, I’d recommend cancelling the Chase Fairmont card if he wants to earn the Sapphire Preferred 50,000 Chase Ultimate Rewards point sign-up bonus.
But before making any changes, Jesse and folks in a similar situation should consider if they’re impacted by Chase’s tougher application rules. Because it’s very unlikely you’ll be approved for the Sapphire Preferred if you’ve opened ~5+ cards from any bank (NOT counting Chase business cards and these other business cards) in the past 24 months.
I’ll share what to consider if you have a credit card being discontinued!
3 Tips If Your Card Is Being Discontinued
Chase announced Fairmont cardholders will automatically convert to the Sapphire Preferred on August 15, 2017. But Citi has not announced which card existing Hilton cardholders will get.
And I don’t have official news, but I suspect we might hear about changes to the AMEX Starwood card later this year or early next year.
If you’re planning for an eventual card product change like reader Jesse, here are a few tips.
1. Consider Bank Application Rules
Before the bank automatically switches you to a new card, think about their application and sign-up bonus rules.
For example, if you’re over the Chase “5/24” limit, getting the Sapphire Preferred without having to apply can be an easy way to get the card. While you will NOT earn a sign-up bonus, you’ll still enjoy the card’s other perks like:
- 2X Chase Ultimate Rewards points on travel and dining purchases
- Primary car rental insurance
- Trip delay reimbursement
- No foreign transaction fees
That said, if you’re under the “5/24” limit, I’d consider cancelling the card being converted to the Sapphire Preferred. Then, submit a new application for the Sapphire Preferred to earn the 50,000 Chase Ultimate Rewards point sign-up bonus (worth $625 in travel).
And if you’re facing a product change with a Citi card, remember the bank has restrictive sign-up bonus rules.
At this point, we don’t know which card Citi Hilton cardholders will be converted to. But let’s say you get the Citi ThankYou® Premier Card. If you ever close the card, you won’t be eligible to earn a sign-up bonus on another card that earns ThankYou points for 24 months.
Because Citi terms say:
Bonus ThankYou points are not available if you have had ThankYou Preferred, ThankYou Premier or Citi Prestige cards opened or closed in the past 24 months.
2. Wait for Product Change, Then Upgrade or Downgrade
One option for folks facing a product change is to wait for your new card. Then, upgrade or downgrade to a card with different perks.
For example, Chase Fairmont cardholders can wait to get the Chase Sapphire Preferred. Then, downgrade to the no annual fee Chase Freedom or Chase Freedom Unlimited.
You’re NOT eligible for the sign-up bonus when you downgrade. But you can earn lots of points with a card like the Chase Freedom Unlimited. Because you earn 1.5 Chase Ultimate Rewards points per $1 on every purchase.
Then, combine points with the below cards and transfer points directly to travel partners, like Southwest and Hyatt:
- Chase Ink Bold (no longer available)
- Chase Ink Plus (no longer available)
- Chase Ink Business Preferred
- Chase Sapphire Preferred
- Chase Sapphire Reserve
3. Impact of Cancelling a Card
You might choose to cancel your card before or after it’s converted. This includes folks like reader Jesse looking to cancel an old card and apply for a new card to earn a sign-up bonus.
When you cancel a card, you lose the credit history and available credit line. And this can impact your credit score. So if the card being discontinued is your oldest card, I’d recommend keeping the card it converts to.
Keep in mind, when the bank changes you to a different card, you won’t have a hard pull and you’ll keep the same account information. So you won’t see any changes to your credit score.
If you have a credit card that’s being discontinued, you will NOT earn a sign-up bonus when the bank converts you to a new card.
Instead, you might consider cancelling your old card before the conversion. Then, submit an application for the card you would get with the product change.
Just remember bank application rules. If you’ve opened 5+ cards from any bank (NOT counting Chase business cards and these other business cards) in the past 24 months, it’s unlikely you’ll be approved for this offer.