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I Pay Annual Fees on 2 Credit Cards That I Never Use – But I’m Not Going to Cancel Them (Here’s Why You Shouldn’t Either)

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I Pay Annual Fees on 2 Credit Cards That I Never Use – But I’m Not Going to Cancel Them (Here’s Why You Shouldn’t Either)

Joseph HostetlerI Pay Annual Fees on 2 Credit Cards That I Never Use – But I’m Not Going to Cancel Them (Here’s Why You Shouldn’t Either)Million Mile Secrets Team

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Every now and again in the miles & points hobby, it’s critical to sit down and reevaluate your wallet.  That’s because you’re consistently opening credit cards that charge annual fees of $95+ per year!

I’ve got ~18 credit cards, the majority of which have (at one point) come with annual fees.  If I decide a card no longer serves my travel situation, I need to ditch the annual fee!

I presently own 2 annual fee cards that I never use anymore (and I actually meant to cancel them last year… 🙁 )  – the Barclaycard Arrival Plus® World Elite Mastercard® and the AAdvantage® Aviator® Red World Elite Mastercard.  But I’m not going to cancel them for 2 reasons:

  • I don’t want to lose the credit history I have with these cards
  • I don’t want my available credit to decrease

There’s a very simple way to maintain these items without paying the annual fee.  Downgrade credit cards!

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I’m keeping my credit history and credit line, but I’m ditching the annual fee by downgrading credit cards

Downgrade Credit Cards Instead of Canceling

When you cancel a credit card, you’ll lose the credit history you’ve accrued with that card.  And if you don’t move your credit line over to another card, you’ll lose your available credit, too!  Both of those things are factors that determine your credit score.

However, if you’re totally done with one of your annual fee cards, you should NOT continue to pay the annual fee just so your credit score won’t take a minor hit.  You can often downgrade your card to a no-annual-fee version.  When you do this, all your card info transfers over to the new card:

  • Credit card number (in most cases)
  • Credit line
  • Credit history

Both my Barclaycard Arrival Plus and AAdvantage Aviator Red have some valuable features that make them worth keeping.  But not enough to justify the annual fees (for me).

For example, the handiest feature of the Barclaycard Arrival Plus (besides the enormous welcome bonus) is that it’s Chip + PIN enabled.  I firmly believe that any globetrotter should have this card.

Chip + PIN comes in very handy when you’re wandering through Europe and you need to use an unmanned kiosk or payment machine (like you’ll find at many gas stations).  Almost any other credit card won’t work with them.

I’m downgrading this card to the no annual fee version (the Barclaycard Arrival), because it’s also Chip + PIN enabled.  I can have my favorite feature without paying an $89 annual fee!

The Hazards of Downgrading a Card

Not All Cards Can Be Downgraded

When you downgrade a card, you must make sure there is a no-annual-fee equivalent.  In other words, there must be a card in the same “family” that comes with no annual fee.  For example:

You’ll also find that many airline and hotel credit cards can’t be downgraded.  They don’t have a no-annual-fee equivalent.

You Might Be Forfeiting a Welcome Bonus

If you downgrade your Chase Sapphire Preferred to a Chase Freedom, you then will not be eligible to earn the Chase Freedom welcome bonus as long as you currently hold the card.

Downgrading Is Not Automatic

When you request a downgrade, the bank reviews your account and decides if you’re eligible.  Banks typically require your account to have been active for at least 1 year before downgrading.

Downgrading Is Easy!

I’ve downgraded cards in the past with Chase (and I think Barclays) simply by sending a secure message through the bank’s website.

I’ve seen some data points saying Chase has insisted you call them if you want to downgrade, but I’ve been successful as recently as 6 months ago.  Just state the card you have, as well as the appropriate no-annual-fee version of the card, and they should message you back in a couple days to confirm the change.  That’s it!

Check out this guide on how to send the banks a secure message.

I’d love to hear your experience downgrading credit cards.  It’s a great way to ditch the annual fees without any negative consequences to your credit score!

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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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I just got chase united with 99$ af; there’s no downgrade. what do people do with this card after the signup bonus

For Barclay’s cards, it is always good to ask for annual fee to be waived or some sort of retention offer. Note the front line rep usually says no and you have to ask to speak to a supervisor.
Resent experiences with the Barclay AA Card:
– My mother-in-law got fee waived (charges ~$12k/year)
– My wife got an offer of a $100 statement credit if charges $1k per month for 3 months (charges ~$18K/year)
– I got an offer of I think 4K points after charging $1K over 3 months (charges – a few K $/year)

That’s great that you were able to get them to waive the yearly fee (now $99 as of 5/1/19 on the Aviator Red card). I have called them 3 times (spoken to a supervisor on 1 of those calls) in May ’19 & each time been told they don’t have any offers right now to waive my annual fee. I have been laid off of work since Jan. ’19 & cannot afford the $99 fee. I only use this card where my Delta Amex is not accepted. Some months I have no charges on the card & some there are & when there are it is paid off in full every month. Are there any other suggestions to get them to waive the annual fee? So disgusted in a company that is unwilling to help a person in their time of need.

Normally, I’d say hang up and call again because another representative might be more accommodating, but it sounds like you’ve already done that.

I’m not too familiar with Barclays, but do they have an option to downgrade the card to one that carries no annual fee?

If all else fails and they can’t waive the annual fee, would they be able to offer some other type of retention bonus, like bonus points for being a long time card member?

Here’s a post that might help:

https://millionmilesecrets.com/guides/credit-card-annual-fee-increase/

So sorry to hear about your employment situation, and here’s hoping you find something soon!

Author
Joseph Hostetler

Way to go! Love these data points, thanks for sharing.

Tried calling Barclays several times today (3/7) and asking for a downgrade with several different agents. There is currently *no downgrade available* for the AA Aviator Red Mastercard. The Barclays agent suggested speaking with the Barclays application department, but they confirmed that even if I applied for a new no-fee Barclays card, they wouldn’t be able to transfer the credit history/credit line of my Aviator Red card to any new card. So this was wasted effort.

@JosephHostetler, please vet the information you write about before posting it. This is becoming a more frequent problem with MMS writers.

Author
Joseph Hostetler

Thanks for commenting, Kelli! And thanks for the data point. As you may not have read below, reader Clyn6 was able to downgrade the Aviator card “quick and easy”, while their husband was unable. Looks like you were one of the unlucky ones with ill-informed customer service reps. You can always ask for a retention offer instead.

I looked on their website and I don’t see a no annual fee Barclaycard Arrival. Do you just have to call and ask for it?

Those are the AA cards, not the arrival card with no annual fee. Is there such a beast?

Is there a card to downgrade the jb business to that has the $99 fee?

If not and I just close and since the points are on my in account, I wouldn’t lose them right?

Thanks

Author
Joseph Hostetler

Oooo, they’re not going to let you downgrade a small business card to a personal card, although it never EVER hurts to ask. Maybe just shoot them a secure message anyway.

That’s correct, you won’t lose your points because they deposit into your JetBlue account when you earn them.

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