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Downgrade Credit Card
Thanks to the pandemic many of us are sitting on a pile of travel awards larger than we know what to do with, one way to save money that could be worth considering is downgrading premium credit cards while we’re using up the awards we already have. Downgrading is simply moving from a certain credit card with an annual fee to a card with a lower (or no) annual fee.
Related: How to Downgrade Chase Credit Cards (Upgrade & Downgrade Options)
Credit card annual fees typically range from $49 to $695 depending on the benefits. Many benefits that justify higher fees are travel centric based perks and credits. Travel related credits are already a topic people spend a lot of time trying to figure out how to maximize, so if you’re not traveling this can be a source of pain to say the least.
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Reasons to Downgrade Credit Cards
- Changes to a rewards program attached to the card where it no longer aligns with your rewards strategy, for example, the loss of a transfer partner.
- Changes to the Credit Card
- Reduced bonus categories or benefits
- Changes in earnings
- Annual fee increase or reduction in benefits
- Your personal situation or needs have changed
- Promotion or job change, lifestyle changes like retirement or expanding family etc.
- Moving can change the hotels and airlines you prefer to earn points with
- Rewards Goals Change- shift from one type of travel to another etc
- Competing credit cards or new products
In this Guide, we’ll cover every facet of downgrading for each major bank including:
- Downgrade eligibility by bank
- Downgrade rules by bank
- Premium card downgrade options
- How to keep the rewards you’ve already earned
- Other reasons you may want to downgrade
Related: How to Choose the Best Credit Card for Hotels
We’re going to cover cards for each banks core transferable currency and cover co-branded cards in a separate post. We’ll cover Ultimate Rewards Credit Card options for Chase, Thank You Points Credit Card options for Citi and Membership Rewards Earning Cards for American Express. Each bank will also be covered in a separate post that will dig into the best strategies for each bank.
Downgrade Chase Credit Cards: Ultimate Rewards
Downgrade Chase Sapphire Reserve ($550)
Downgrade Chase Sapphire Preferred Credit Card Options ($95)
- Sapphire (No longer available for new applicants but should be available as a no fee downgrade option.)
- No Fee Options
- Freedom
- Freedom Unlimited
- Slate
Chase Ink Preferred (or Chase Ink Plus) $95
- Chase No-Fee Business Card Options
- Chase Ink Business Unlimited
- Chase Ink Business Cash
Time Frame: Downgrade Eligibility
- Wait one year to downgrade so that you avoid giving Chase a reason to think you’re gaming their system.
Downgrade Rules: Type of Cards
- Same product family (Ultimate Rewards earning cards or same co branded card family like United and IHG for example)
- Business cannot be downgraded to personal and vise-versa (even if it’s the same product family)
Related: Complete Guide: Chase 5/24 Rule (2020)
Lesser Known Downgrade Options
- Chase Sapphire (no fee)
Bank Specific Concerns
- Chase Ultimate Rewards: Lose ability to transfer your points to FF programs if you don’t hold one of the premium cards
- CSR
- CSP
- Chase Ink Preferred
- Chase Ink Plus
- Earn bonus once every 2 years (as long as you’re not currently a cardholder and you haven’t earned the specific card’s sign up bonus in the last 24 months or 48 months for Sapphire bonus)
Ways to Downgrade but Preserve the Value of Points
- Must have CSP, CSR, Ink Biz Preferred or Plus:
- to transfer to partners
- To use points for travel at an increased rate (1.5 for CSR and 1.25 for the others)
- Transfer to one other member of your household who is primary cardholder on their own account or owner of the company
- Keep one premium card and transfer all your own points to that premium account
Downgrade American Express Cards: Membership Rewards
Downgrade Amex Platinum Card ($695)
- Personal Gold ($250)
- Personal Green ($150)
No Fee Options are not available to downgrade for downgrade from the above options but any Membership Rewards card will keep your points alive. This includes any membership rewards earning credit card like the Amex Everyday Preferred.
Time Frame: Downgrade Eligibility
Related: Simple Tips to Avoid these Costly Miles and Points Mistakes
Downgrade Rules: Type of Cards
- Same product family (Ex. Membership rewards, cash back etc)
- Business cannot be downgraded to personal and vise-versa
- Charge cards cannot be downgraded to credit cards and vice-versa (note Amex no longer calls many of their charge cards, charge cards- that’s probably outside the scope of this guide)
Bank Specific Concerns
Don’t downgrade to a card you’ve never had because it’ll preclude you from earning sign up bonus (strategy on how I applied for a new card first)
Membership Rewards points can only be transferred to an authorized user’s frequent flier or loyalty account if they’ve been an AU on your account for at least 90 days
How to Downgrade Amex but Preserve the Value of Points
- Apply for the card you’re planning to downgrade to before downgrading so that you get the welcome bonus before you are no longer eligible
- Choose a no fee MR points earning credit card to keep the points alive, this is a great benefit over the other programs because all MR points are transferable
Downgrade Citi Credit Cards: Thank You
Downgrade Citi Prestige Card Options ($495)
- Citi Thank You Premier ($95)
- No Fee
- Citi Thank You
- Citi Rewards+ Card
- Citi Double Cash
Time Frame: Downgrade Eligibility
Citi requires you to have the Card open for 12 months to be eligible to downgrade.
Downgrade Rules: Type of Cards
- Cards do not have to be the same product family, there are some cross over options available with Citi.
- Business cannot be downgraded to personal and vise-versa
Bank Specific Concerns
- Citi Thank You Points from anything other than CC earnings are not transferable
- Even if you transfer points, they still expire 60 days from when the account is closed.
- If you transfer your Thank You points to another member they expire after 90 days
Ways to Downgrade But Preserve the Value of Points
Save value of TYP by transferring to other members (can’t be transferred to anyone elses loyalty accounts but Thank You accounts are fine)
- remember transferred points expire 90 days after transferred and
- There’s a limit to 100k per year on giving and receiving
Thank you!! This is awesome.
Thank you so much ?
Hi! I am having a problem with citi. After many years (at least 10) of using my Citi AA platinum and Citi AA gold, I find that I no longer care for the benefits. I also have a cIti thank you, chase sapphire, amex platinum and amex gold. However, while amex and chase allow you to keep your same credit limit if you downgrade to a no fee card, and even to transfer that credit limit to a different card should you want to close, Citi told me that they might slash my credit limit if I downgrade my AA citi platinum or/and hold card/s. I don’t even need the credit but I have a very high limit and if it’s suddenly lowered it will be a red flag and make credit agencies erroneously think that I am racking up debt. I am kind of upset at citi because I am now stuck with a high-fee card I don’t need and I am interested in your thoughts. Thanks !
I would downgrade them- if your credit utilization ratio is low it shouldn’t matter too much as long as you have other credit cards. I definitely wouldn’t hold on to a high fee card just for that because it’s not like they’re definitely going to lower the limit and even if they do any bounce will be temporary.
you can try to offset your credit limit by asking your other credit cards to increase your limit. Say your citi has a 10k limit. Ask amex and chase to increase to 5k each. This way you will still have that 10k.