Don’t Cancel Your Chase Credit Card – It’s Smarter to Downgrade It Instead

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Don’t Cancel Your Chase Credit Card – It’s Smarter to Downgrade It Instead

JasminDon’t Cancel Your Chase Credit Card – It’s Smarter to Downgrade It InsteadMillion Mile Secrets Team

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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.

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Don’t Cancel Your Chase Credit Card – I Just Changed Mine to a No Annual Fee Card Instead

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.

The information for the Chase Freedom® has been collected independently by Million Mile Secrets. The card details on this page have not been reviewed or provided by the card issuer.

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.

Harlan’s No Annual Fee Chase British Airways Visa Card Looks Identical to His Old One

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.

Bottom Line

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).  😉

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Chase Sapphire Preferred® Card

Chase Sapphire Preferred® Card

  • Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
  • Chase Sapphire Preferred named "Best Credit Card for Flexible Travel Redemption" - Kiplinger's Personal Finance, June 2018
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • No foreign transaction fees
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
  • No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards

More Info

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If you downgrade from the Sapphire instead of cancelling, can you apply for it again in the future and get the bonus again? My strategy will be to flip flop between my wife and I and each keep our Sapphire card for about 23 months. That way we are only paying the $95 fee once every 2 years, and can keep getting the bonus every other year.

We have had a United card for 29 years with a 45K limit. It is a joint account (not authorized user). We are under 5/24 and would like to apply for more Chase cards, but when we got the Southwest card last year we had to close a 10K limit card to get it. We weren’t able to move credit from the United card (which we don’t use) because it is joint. I have been afraid to close it because it has such a long history, but would like to have that 45K credit amount available for other cards. I think it would lower my average age of accounts from 10 to 7.9 if I am calculating it right. How much difference will that make? Credit score is always good-well over 800.

If it were me, I would cancel. I don’t think there will be any noticeable difference in credit score. 7.9 years is still an extremely long average average length.

Just message them and have the credit reduced. That works for me so I have credit available for new applications.

But if you’ve had your Sapphire a short time CANCEL it. I’m on my 4th Sapphire in 9 years. That’s slot of bonuses.

Chase wouldn’t let me downgrade either my Sapphire Reserve or my United card, so I had to cancel them, yet somehow they let my husband consolidate his IHG cards after telling me that I would simply only be able to cancel one. Obviously, I’m not very happy with Chase’s customer service at the moment.

Author

Hi Jen – That’s very strange – what Emmanuel said below is correct. Lots of people report being able to downgrade their Reserve and UA cards – had it been more than 12 months since you opened either card?

I’ve had the united card for about 3 1/2 years and the sapphire reserve for 2. I cancelled the sapphire back in November so I could still get the fee refunded. Just cancelled the united this week. I tried to downgrade both of those as well as my IHG card since i have two of those. All three Chase people I spoke with said that I couldn’t. I tried to get downgraded to the free united card, but the agent said that I wouldn’t be allowed to do that. I would have to close my current account and reapply for the free one after. IHG told me it wasn’t possible to consolidate cards, and yet my husband was able to do so. I tried to downgrade the Sapphire reserve to preferred, and had been told the same thing as the united card.

Do you know what the time frame to reopen the cards is? I’m going to have my husband on the line with me this time, since every time I call I get told repeatedly that what I’m asking is impossible.

Author

Hi Jen – That is very odd. I wish I had a better answer for you as to why they wouldn’t let you product change – many folks have had success doing the exact thing you wanted to do.

As for timeframe to reopen, for most Chase cards you’re not eligible if you’ve received a bonus on that card in the past 24 months. One notable exception – the Sapphire cards require 48 months since you last earned a bonus on any Sapphire card.

Gook luck and please let us know how you make out.

Thanks, will do!

Jen, you should call them back again. You spoke to a clueless CSR. You have a window to withdraw your card cancellation request. Sapphire Reserve can indeed be downgraded and the United Explorer to the No-Fee UA Card. Good Luck. Let us know please.

My 5 years united was not downgraded to no-fee card too. No AF waived, no retension offer, may be they will offer if I fly again with united. So just cancelled it.

Author

Hi Emmanuel – Thanks for helping out!

You should have downgraded to a freedom unlimited. That way you have the freedom for the 5% bonus categories and the feeedom unlimited for the 1.5% other categories. The only reason I see to have two freedom cards is to max out the bonus categories on both cards.

Author

Hi Jeremy – I considered that, but don’t want to lock myself out of earning a bonus on the Freedom Unlimited later (I’ve never had it). I’ll make the most of the rotating categories on the 2 Freedom cards for sure.

You make perfect sense on both counts!

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