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When an annual fee is due, it’s a good time to assess whether or not a credit card is worth keeping. To decide if you should continue with a card, consider if the perks make it worth the expense, or if you have other cards that overlap benefits and spending categories. In many cases, credit cards can get you an ongoing value worth far more the annual fee. But if that’s not the case for you, it may be time to let go.
After tweaking my credit card strategy, I just retired my beloved Chase Sapphire Preferred Card (still the #1 credit card I recommend to friends and family starting out with miles and points) after the annual fee came up. It’s my oldest travel credit card with a high credit limit, so has a big impact on my credit score. But instead of canceling it, I downgraded it – that is, changed it to a no-annual-fee card – and kept the same account number, credit line, and length of credit history.
This is important. When you cancel a card, you can lose ground on your credit score because your length of credit history and amount of available credit will decrease. If you’re thinking of canceling a Chase credit card, don’t do it until you’ve explored all of your options to change it to a different card product first.
I’ll explain why downgrading instead of canceling a Chase credit card makes sense.
Don’t Cancel a Chase Credit Card If You Can Help It
If you’re on the fence about keeping a credit card when the annual fee comes due, it’s always worth calling first to see if you can snag a retention offer. Sometimes, credit card issuers will give you extra points, a spending bonus, credit, or other goodies to encourage you to keep the card.
Canceling a credit card outright should be a last resort. If you can product change to a no-annual-fee card instead, that’s your best bet, because you’ll preserve your credit history (super important for your credit score if it’s a card you’ve had for a while) and credit line.
I downgraded my Chase Sapphire Preferred to a Chase Freedom (which has no annual fee) because I recently got the Ink Business Preferred Credit Card, which has some overlapping benefits and spending categories. It only took a few minutes to call the number on the back of my card and explain what I wanted to do – and I kept the same card number and credit limit.
Although I already had a Chase Freedom, it didn’t matter to Chase (because you won’t earn a welcome bonus on a card you product change to). So now I have 2 Freedom cards.
Harlan had a similar experience when the annual fee came around on his British Airways Visa Signature® Card. When he called Chase to discuss his options, they offered him a no-annual-fee version of the card (with fewer benefits), which you can’t apply for directly. He kept his credit line and card number, although the actual card looks exactly the same as the old version.
The information for the British Airways Visa Signature Card has been collected independently by Million Mile Secrets. The card details on this page have not been reviewed or provided by the card issuer.
Not all Chase credit cards can be product changed (downgraded or upgraded) to a different card, though. Here are a few other rules to keep in mind:
- You can’t change a business card (like the Ink Business Preferred) to a personal card (like the Chase Sapphire Reserve), or vice versa
- You can’t change a charge card (like the old Chase Ink Bold) to a credit card, or vice versa
- You can’t change a Chase Ultimate Rewards card (like the Chase Sapphire Preferred) to a co-branded credit card (like The World Of Hyatt Credit Card), or vice versa
- You won’t be allowed to product change a card unless you’ve had it for at least 12 months
- There’s not normally a credit pull when you product change a card, but you should always confirm to be sure
- You should be able to keep the points you’ve earned from the previous card
Similar principles apply to most other banks. You can read Scott’s post about why it’s smarter to downgrade rather than cancel a card here.
Instead of canceling a Chase credit card, see if you can downgrade it to a no-annual-fee card first. It’s better for your credit score, because you’ll keep your credit line, history, and account number.
You can’t change all Chase credit cards to a no-annual-fee card, so it’s best to discuss your options with a Chase representative by calling the number on the back of your card. Also be sure to confirm there’ll be no credit pull and that you’ll keep your existing points before pulling the trigger on the downgrade.
I just swapped out the card I’ve had the longest – the Chase Sapphire Preferred – for a Chase Freedom with no annual fee. It didn’t make sense to continue paying the annual fee on the card when I also have the Ink Business Preferred.
Admittedly, I’m a little sad about getting rid of my trusty old Sapphire Preferred. But it had to be done as part of my bigger credit card strategy this year. So … goodbye for now, old pal – may you rest easy in the great sock drawer in the sky (and maybe I’ll see you again one day). 😉