Should You Cancel a Card That’s Being Discontinued?

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Should You Cancel a Card That’s Being Discontinued?

Million Mile SecretsShould You Cancel a Card That’s Being Discontinued?Million Mile Secrets Team

We devote thousands of hours of research to help you get Big Travel with Small Money. You support us by signing-up for credit cards through partner links which earn us a commission. Here’s our full Advertising Policy.

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?

Credit Card Discontiued
The Sign-Up Bonus on the Sapphire Preferred Can Get You $625+ Worth of Travel!  So You Can Visit Scenic Destinations, Like Laguna Beach, California

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

Link:   Chase Fairmont Is Discontinuing for Good

Link:   Citi Hilton Cards Discontinued

I’ve written about recent announcements that a few hotel cards were discontinued.  This includes the Chase Fairmont and Citi Hilton cards.

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.

Credit Card Discontiued
There Are a Few Hotel Credit Cards Going Away!  Plan Ahead to Make Sure You’re Getting the Best Deal

If you’re planning for an eventual card product change like reader Jesse, here are a few tips.

1.   Consider Bank Application Rules

Link:   How Does a Chase Product Change Impact Earning Future Sign-Up Bonuses?

Link:   Citi Rules Restrict Sign-Up Bonuses to Once per “Brand” Every 24 Months

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:

Credit Card Discontiued
Earn 2X Chase Ultimate Rewards Points on Purchases at Restaurants With the Sapphire Preferred

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 CardIf 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.

Credit Card Discontiued
You’ll Save Money on Annual Fees by Downgrading the Sapphire Preferred to a No Annual Fee Card

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.

Credit Card Discontiued
Combine Your Chase Ultimate Rewards Points to an Eligible Card and Transfer Points to Hyatt for Stays at the Grand Hyatt Tokyo, Where Emily Recently Stayed

Then, combine points with the below cards and transfer points directly to travel partners, like Southwest and Hyatt:

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.

Bottom Line

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.

For example, Chase Fairmont cardholders can cancel their card.  Then, apply for the Sapphire Preferred to earn the 50,000-point sign-up bonus.

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.

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If citi sells the accounts to AMEX, will the new AMEX card show up on my credit report, adding to the Chase 5/24 count?

Chase wouldn’t let my wife converted her sapphire preferred to freedom just this week after it had been converted from Fairmont 🙁

Anyone else have luck?

You have to convert first to Regular Chase Sapphire (no fee) and then wait a week or two and request a product change to Freedom Unlimited. They won’t let you go straight from Sapphire Preferred to Freedom Unlimited.

Million Mile Secrets

@Corinne – Thanks for helping out and sharing this tip!