Published on February 23rd, 2018 | by William Charles161
Best Downgrade Options & Rules For Each Card Issuer
Update 02/23/18: Chase no longer allows product changes via secured message, you now have to call in as per Frequent Miler. Not a huge change, but will make a difference for those with less than enthusiastic partners.
A lot of credit cards come with a high sign up bonus and an annual fee that’s waived for the first year. That means it’s possible to sign up to get the bonus, then cancel the card before the annual fee actually hits. The downside to this is that it will eventually lower your average age of accounts, which is a factor in credit scoring algorithms such as the FICO score.
You may be offered a retention bonus (e.g extra points or having the annual fee waived) which makes it worth keeping the card open.
Another option is to downgrade your card to a no annual fee card from the same card issuer. Because this is considered a product change it doesn’t affect that trade line on your credit report, this means that your credit card will continue to age and thus increase your average age of accounts in the long term.
Ideally what you want to do is downgrade to a card that you can also use, whether it be because it has rotating 5% categories or a particular benefit that is useful. Unfortunately, what I’ve outlined above is really a best case scenario and it’s not always possible. Sometimes certain card issuers will do a hard pull when you do a product change, sometimes they’ll report a new opening date instead.
Below we’ve listed the best downgrade options for each card issuer, along with the rules and “fine print” that each card issuer has when it comes to product changes/downgrades. If you find any inaccuracies, please share your data points in the comments below.
The below rules apply to all card issuers, unless otherwise noted.
- You cannot downgrade/switch between a charge and a credit card
- If you downgrade to a card, you’re not eligible for that cards sign up bonus
- You cannot downgrade personal cards to business cards and vice versa
- You cannot downgrade charge cards to credit cards.
- Annual fees on the cards are pro-rated monthly, for example if you have the platinum card with a $450 annual fee and you downgrade four months after paying an annual fee you’ll get a $300 refund. [In September 2016, Amex is changing the prorate policy for cancellations, but it doesn’t affect downgrades.]
- Annual benefits (e.g $200 airline reimbursement) are on a calendar year basis rather than cardholder year (e.g you could apply in December, get a $200 reimbursement in December and then another in January and then cancel in February getting most of the annual fee back.
- Ongoing benefits (e.g airport lounge access) require you to have an active card
- American Express only allows co-branded product changes if the card stays within the same brand
Best downgrade options:
- AmEx EveryDay: This card has no annual fee and earns American Express membership rewards points, this means you can downgrade to this card and still have the option to transfer to airline and hotel partners. Also up to 2.4 Membership Rewards points on grocery store purchases and 1.2 on all other purchases.
- Blue Cash Everyday: No annual fee and 3% on the first $6,000 in spend at grocery stores
Unfortunately it doesn’t look like it’s possible to downgrade to the Old Amex Blue (although some people reported success earlier), it might be worth trying as this card earns 5% cash back on U.S gas stations, U.S grocery stores and select U.S drugstores after you spend $6,500 in a reward year.
For charge cards (Platinum, Gold, PRG) the cheapest downgrade option is the Green card with a $95 annual fee. (For business charge cards, there’s also a $75 annual fee Green card, but that one doesn’t earn points so you might want to opt for the $95 annual fee Green card even when downgrading a business card.)
Bank of America
Best downgrade options:
- BankAmericard Travel Rewards credit card: No annual fee or foreign transaction fee and earns 1.5x points on all purchases. Also has chip + PIN functionality which could make it an attractive option for those traveling internationally. 10,000 point sign up bonus is the standard which you would be missing out on.
- BankAmericard Cash Rewards credit card: No annual fee and earns 3% cash back at gas stations and 2% cash back at grocery stores on the first $1,500 in spend per quarter. There are cards that earn at a much higher rate for grocery store purchases and gas station purchases which is why we’ve ranked this #3. Card usually comes with a $100 sign up bonus which you’d be missing out on.
When it comes to Barclaycard, I wouldn’t recommend doing downgrades/product changes. There are a few reasons for this which I’ll outline below:
- It’s possible to get Barclay bonuses multiple times, simply cancel and apply again
- Barclays likes to see you putting spend on your existing cards before approving you for new ones
If you really do want to downgrade your card, Barclay offers no fee versions of their annual fee based products, which usually have lower sign up bonuses and worse earning rates but without an annual fee. You’ll be much better off just calling and asking for a retention bonus, these are usually generous and most times they’ll simply waive the annual fee.
Best Downgrade Options:
I’m unsure of the rules of doing product changes with Capital One, it seems sometimes they’ll allow you to do it with no problems and other times they’ll deny your request. Either way there is no hard pull. You can check your options here.
- Capital One Quicksilver. No annual fee, no foreign transaction fee, 1.5% cash back and now comes with an EMV chip. Even better is that it also gives you a spotify discount
- You cannot downgrade a co-branded card to a Chase card (e.g a Southwest card cannot be downgraded to the Chase Freedom) and vice versa
- Co-branded cards must be downgraded within the same brand. For example, it’s possible to downgrade the United Club Card to the Explorer but it would not be possible to downgrade this to the Chase Amazon
- Your card must be opened for at least twelve months before you’re able to product change it to a different card. You can get around this by product changing to the Chase Sapphire.
- If your card has an annual fee, you’ll receive a prorated refund according to this comment.
- There is no hard pull and you keep your credit history
- Chase no longer allows you to product change via secured message, you must call in
Best downgrade options:
Your downgrade options are going to be highly dependent on what card you’re downgrading. With the co-branded cards downgrading isn’t worthwhile as even the “basic” cards come with an annual fee, we’d recommend going after a retention bonus instead and if that fails just canceling. United is the exception to this rule as the have a no annual fee card. If you don’t hold a Chase Sapphire Preferred/Ink Plus or Ink Bold you won’t be able to transfer to airline/hotel partners, that said you can just cycle through these three cards continually keeping this transfer ability without paying an annual fee and scoring the sign up bonuses each time (as the annual fee is usually waived first year. This is more difficult with the introduction of the Chase 5/24 rule).
- Chase Sapphire Preferred:
- Chase Freedom: No annual fee and rotating 5% categories. The sign up bonus regularly goes up to $200 which is one of the higher cash sign up bonuses, so we’d recommend downgrading to this card if you already have another Chase Freedom and have received the bonus on that card (yes, it’s possible to have multiple Freedom’s and yes you get the $1,500 quarterly spending limit on each card).
- Chase Sapphire: No annual fee and 2x points on restaurant purchases. There are other cards which earn at a much higher rate for restaurant spend but this might be an OK option if you value Chase UR points extremely high. Sign up bonus occasionally goes up to 20,000 + 2,500 points at the same time the CSP goes up to 50,000 + 5,000 points. (Bear in mind that you won’t be able to apply for another Sapphire card – CSP or CSR – if you hold the Chase Sapphire.)
- Chase Ink Plus:
- Chase Ink Cash: No annual fee and earns 5x on the same categories as the Ink Plus. The only difference is that this card doesn’t have the ability to transfer to hotel & airline partners. If you have a Chase Sapphire Preferred then you’ll still be able to do this though.
Best downgrade options:
- Citi Dividend: No annual fee and earns 5% cash back in rotating categories. Rather than having a quarterly limit on how much cash back you receive, it’s annual. The annual limit is $6,000 in spend or $300 in cash back. This makes it a more attractive option than the Freedom/it cards as if you get a quarterly category you like you can take full advantage of it.
- Citi doublecash card: No annual fee and earns 1% cash back when you make a purchase and another 1% cash back when you pay your statement. Card doesn’t usually come with a sign up bonus making it a perfect downgrade target.
- Citi ThankYou Preferred Card: No annual fee. Earns 2x points on dining and entertainment. This card also often offers targeted promotions where you can earn 5x-10x in popular categories. This is no guarantee of getting these though and it seems to be happening a lot less often.
- Citi Diamond Preferred: No annual fee. This card is really just used to get access to Citi Easy Deals.
- Card must be at least twelve months old before downgrading
- Conversions can take up to 51 days (this is usually done much sooner)
- Some representatives will say that product changes must be done within the same product family (e.g an American Airline card must be downgraded to another AA card). This is not the case, rather than arguing, hang up and call again.
- Need to wait a minimum of one year
- Cannot be done when you’re enrolled in a Discover promotion (e.g Discover Cashback Match)
- It’s now possible to complete this change online.
- You cannot product change a co-branded credit card to a proprietary credit card (e.g you cannot product change a Club Carlson to a Cash+) and vice versa.
Best downgrade options:
- U.S Bank Cash+: Card comes with no annual fee and you get to pick two 5% cash back category, limit of $2,000 spend ($100 cash back) per quarter. It’s possible to get more than one of these cards as well.
Update 2: Wells Fargo does do product changes. It might be worth doing a product change to one of their no annual fee cards, as they’ll continue to receive the phone insurance. When they do product changes they close your current card and open a new one. This means it does not keep it’s account history, but no hard pull is done.
Update: Wells Fargo does not allow product changes, so it’s not possible to downgrade your card.
The only Wells Fargo cards with annual fees are the new Propel cards, unfortunately these cards haven’t been out for long enough so there isn’t any data points on what cards it’s possible to downgrade to. As I see it there is basically two options: Downgrade to one of the 5% cards that have a six month limit. There are a number of these cards, they have different names but they are all the same. Basically they have no annual fee and for the first six months you earn 5% cash back on gas, grocery and drugstore purchases. This would be far the best option if downgrading still grants you the introductory six month 5% period. If the above option is not possible, then you can downgrade to the Wells Fargo Platinum card which also has no annual fee. The downside is that this card comes with no rewards program, so it would be purely for improving AAoA.
Smaller Card Issuers
Alliant does allow product conversions, in fact if you upgrade to their cashback Visa signature card then you will earn 3% cash back with no annual fee in the first year. Read our full review of this card here.
Doesn’t allow product conversions.
What are your favorite downgrade targets and why? Am I missing a card issuer or a particular rule for a card issuer? Let me know in the comments. As mentioned at the start, always check to see if you’re offered a retention bonus before downgrading as you might get an offer that is too good to refuse.