Don’t cancel your Chase credit card – It’s smarter to downgrade it instead

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When an annual fee is due, it’s a good time to assess whether or not a rewards 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, travel 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 after the annual fee came up. It’s my oldest card with a high credit limit, so it 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.

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Don’t cancel your Chase credit card – I changed mine to a no-annual-fee card instead. (Photo by Jasmin Baron/Million Mile Secrets)

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 two Freedom cards.

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 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.

The information for the Ink Business Preferred Credit Card and the Chase Freedom 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.

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 every single Chase credit card 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 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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Jasmin Baron is a contributor to Million Mile Secrets, he covers topics on points and miles, credit cards, airlines, hotels, and general travel.

Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

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Eric
4 months ago

I already have a Chase Freedom like Joseph. He downgraded the Chase Sapphire preferred to a CF but can you downgrade a Chase Sapphire Reserve to another Chase Freedom? Do you have to wait after 12 months as well to do the downgrade?

Tony Sgro
5 months ago

Recent obtained sapphire credit card dated 03/18/2020. Do to suspected fraud. Was not able to activate card until o3/27/2020. Now due to corona virus unable to go out and spend required $4000.00 in a 3month period. Is chase going to somehow extend that time frame. Thank for you consideration.

davebarnes
7 months ago

“Don’t cancel because of the impact on your credit score”
Really?
I did not see this when I cancelled a Chase Iberia Visa card.
And, even if it did; who cares about about a 10-point drop?

John
7 months ago

I have the reserve. Hate the new “benefits “ that don’t interest me one bit. Don’t particularly see the benefit of the preferred since I have an Amex platinum and just added the green card that gives me the same bonus categories as the reserve. So I’m going to have to cancel the reserve.
Also it’s the principle. Chase needs to know that a lot of us are not happy with the fee increase in exachange for millennial perks.
Good bye ….

April Korell
1 year ago

Thanks for the valuable article. I was wondering, if I were to product change from the preferred to freedom, would I still be able to apply for another freedom in the future AND GET THE WELCOME bonus then?

Jesse
1 year ago

Hello!

Just to confirm, you cannot downgrade within the first 12 months of the product? I have the Chase Sapphire Reserve and got my $300 travel credit, and would like to downgrade to the Preferred at some point.

Thank you!

Andrew Wan
Reply to  Jesse
1 year ago

Yeah, based on what a lot of people are also reporting in online forums, it’s 12 months.

Tam
Reply to  Andrew Wan
1 month ago

@Andrew, How do we avoid paying the annual renewal fee and downgrade the card to a Chase Freedom if we have to have had the card for 12 months?

Jesse
Reply to  Andrew Wan
1 year ago

That’s what I was told over the phone, too. Appreciate further confirmation.

An additional question/recommendation… We are getting married in October 2020, eyeing a honeymoon sometime in the first half of 2021. Considering downgrading to the Preferred next June when my 12 months are up and still racking up the points, and then re-upgrading for the honeymoon for the lounge access and $300 travel credit. Reasonable idea?

Joe
1 year ago

Do anyone know how to get across with the Chase to request a British Airways card downgrade.

I tried a couple of time. They told me there is no such card to downgrade?

Andrew Wan
Reply to  Joe
1 year ago

Hi Joe,

I read a few reports in online forums from 2018 that said there is a no-fee version of the British Airways Visa card.

If you’ve called in a few times and gotten the same answer that there is no option though, it’s possible they may have quietly discontinued it.

Natalie
1 year ago

I am planning to get the sapphire preferred but would like to downgrade to the regular sapphire when the annual fee comes up. I currently have the freedom card. My plan is to combine points from freedom and the preferred so that I can transfer points to partner airlines. If I downgrade, will I still be able to do that? I used to have the regular sapphire card many years ago and it closed maybe 3-4 yrs ago due to inactivity.

Andrew Wan
Reply to  Natalie
1 year ago

Hi Natalie,

I might be wrong, but I don’t think it’s possible to downgrade to the no-annual-fee Chase Sapphire. At least, not anymore.

I did a quick search and it looks to be a discontinued product.

VSR
Reply to  Andrew Wan
1 year ago

you can still downgrade…just call…you’ll never find it on the Chase site. Its not offered to new applucants.

Andrew Wan
Reply to  VSR
1 year ago

Thanks, that’s good to know!

David
1 year ago

I called to downgrade the Chase British Airways card before upcoming annual fee. In the past years, I have only used it to get 10% off on BA flights but this is not important for me anymore.

To my surprise, I was denied to switch to Freedom Unlimited. I would have to cancel and apply. Rep was very adamant and also has not offered a fee waiver.
The card might be 10 y old from the time it gave us the 100 000 miles bonus. Will try in local Chase branch.

Ron R.
Reply to  David
1 year ago

Don’t think you can change an airline card to a Freedom. My annual fee just came due on my BA card, and I downgraded it to the no annual fee version. It earns .5 points per dollar, but I don’t care, I don’t plan on using it. If I need Avios, I can transfer them from UR, MR, or TYP. Kept the same number, card does not look any different.

Nancy
1 year ago

I’ve had the Chase Sapphire card since 2013. I just received my 4th Chase Explorer card (always cancelled before the annual fee was due). I want to cancel my Sapphire card because the annual fee is coming up. Should I downgrade my Sapphire card to a Chase Freedom or just cancel my Sapphire card. I’m trying to avoid any credit card with an annual fee. Can points earned on the Freedom card be transferred to Chase Ultimate Rewards? Thx

Emmanuel S Ruiz
Reply to  Nancy
1 year ago

Never cancel it outright. Downgrade it to one of the Freedom cards or to the no-fee Sapphire. Now, none of these cards can transfer to UR. Thse are cashback cards.

Nancy
Reply to  Emmanuel S Ruiz
1 year ago

What benefits does the no-fee Sapphire have?

Emmanuel S Ruiz
Reply to  Nancy
1 year ago

2x on Restaurant and Travel Bookings through the Chase Travel Portal. Slight differences on the Benefits side as well.

Kevin
1 year ago

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.

Emmanuel S Ruiz
Reply to  Kevin
1 year ago

It is a 48 months wait for the Sspphire Cards now.

yvonne
1 year ago

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.

Todd
Reply to  yvonne
1 year ago

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.

Lynn
Reply to  yvonne
1 year ago

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

Dine
1 year ago

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.

Jen
1 year ago

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.

Jen
Reply to  Jasmin
1 year ago

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.

jen
Reply to  Jasmin
1 year ago

Thanks, will do!

Emmanuel Ruiz
Reply to  Jen
1 year ago

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.

haha
Reply to  Emmanuel Ruiz
1 year ago

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.

Jeremy
1 year ago

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.

Emmanuel Ruiz
Reply to  Jeremy
1 year ago

You make perfect sense on both counts!

Emmanuel S Ruiz
1 year ago

I don’t understand the overlapping benefits between the 2 cards. The Ink does not give 2x on Restaurants and Entertainment. Rental Car coverage is way too different either. The only reason to downgrade is to avoid paying $95.00 x 2. But not because of overlapping category bonuses. Can somebody correct me please?

Jon
1 year ago

Southwest sends direct emails often about upgrading a current card to the new premier card. If I upgrade does that count as a new card on the 5/24 rule?

Fred
1 year ago

Is the basic premise of this article true? Even if you cancel a card, its history remains on your credit report for many years so that would imply that cancelling it doesn’t affect parameters such as average age of account. Thoughts?

Ben
Reply to  Fred
1 year ago

I can confirm that canceling a long standing old card does affect history. Chase recently closed my chase slate card because I had not used it in 2 years. It was my first credit card before I started the rewards habit and I had 9 years of credit history. I saw my score dip almost 30 points due to this oversight on my part, because it is not credit history but length of open credit that matters more.

Richard
1 year ago

Great idea! I was going to Cancel my Chase Sapphire Preferred because I now get 4X Cash Back on Dining and Entertainment (Theater & Sports) with the Capital One Savor Mastercard but I will downgrade to the Freedom instead. Caveat with the Savor however – the Merchant determines the Category. If you buy Theater Tickets or Sporting Event Tickets at a University, it will not earn 4X but rather be in the Learning & Education Category and only earn 1X. Best to make a small purchase with any Merchant at which you believe you will get 4X to verify their Category before making a big purchase. For my other expenses, it is always 2% Cash Back with Fidelity Visa except Gas and Groceries for which I earn over 2% Cash Back with the Pentagon Federal Credit Union Platinum Rewards Visa.

Elena
1 year ago

Will you be able to open another Sapphire card in 24 month?

Laila
1 year ago

Is it good to have several credit cards

Jim Lovejoy
Reply to  Laila
1 year ago

Only if you pay each of them off in full every month. And only if you have a reason to have several credit cards (Welcome bonus, different bonus categories, ‘free’ hotel room with renewal.

If you can answer yes to those questions, having several credit cards may even help your credit score by reducing the percent of credit utilization. If you answer no to the pay off in full every month do NOT take out credit cards.