Rewards cards, especially elite rewards cards, offer great benefits and travel rewards to cardholders. After you get hit with the big annual fee, however, you might decide that the card is no longer worthwhile for you.
Alternatively, you may have moved or developed other travel preferences that prevent you from using your rewards card as much as you used to. You might just prefer a different card that has better travel options to a particular location.
Regardless of the reason, there might come a time when you decide that you would like to downgrade your rewards credit card.
Before You Downgrade Your Credit Card
First, you should find out if your current rewards and account information will transfer to your new card. Downgrading your card is better for your credit score than simply closing your account.
When you downgrade, make sure you can keep your account number and credit limit as well. This means there will be no change to your account information, credit utilization, and length of credit history on your credit report.
Also, check to see if a downgrade is even possible for your particular rewards card. Credit card companies generally offer a few different brand lines of credit cards, and not all of them have multiple tiers of rewards. For example, airline– and hotel-branded credit cards may not have multiple card levels.
Compare Rewards Cards
Chase Sapphire Preferred® Card
- Get 60,000 points after spending $4,000 on purchases within the first 3 months of account opening
- Earn 2X points on travel and dining at restaurants worldwide, 1X points on all other purchases
Capital One® Savor® Cash Rewards Credit Card
- Earn 4% cash back on dining and entertainment
- Earn 2% at grocery stores, and 1% on everything else
Capital One® Quicksilver® Cash Rewards Credit Card
- Get unlimited 1.5% cash back on every purchase
- Lengthy intro APR on balance transfers
How to Downgrade a Credit Card by Company
How to Downgrade a Credit Card from Chase
Chase only allows you to downgrade into a credit card in the same product line as the card you already have, according to credit card experts. For example, you can’t downgrade from a Chase Sapphire Preferred card with a $95 annual fee into a Southwest rewards card with a $69 annual fee. The United Airlines-branded credit card actually has three different tiers, so you could downgrade within that family of cards.
The Chase Sapphire Reserve card is the elite rewards card with the most benefits. Cardholders get three times the number of points rewards on travel-related purchases. Redeeming points for travel rewards through Chase Ultimate Rewards gives cardholders a 50 percent premium.
The annual fee for this card, however, is $450. If you are not earning a lot of points, the annual fee may not be worthwhile.
You could downgrade to the Chase Sapphire Preferred card and pay a $95 annual fee instead. You’ll earn two times the number of points rewards on travel-related purchases and get a 25 percent premium on travel rewards through Chase Ultimate Rewards.
How to Downgrade a Credit Card from American Express
Downgrading an American Express card can be a challenge because you have to stay within the same family of cards. You also cannot switch from a credit card to a charge card, according to credit card experts.
There are actually four different levels of Delta American Express rewards cards. The Delta Reserve Credit Card offers the most benefits to cardholders, but it comes with a $450 annual fee. The Platinum Delta SkyMiles credit card has an annual fee of $195 and provides an extra benefit of one free companion certificate annually. If you use this benefit, it is probably worth more than the $195 annual fee.
If you don’t use the benefit, however, you might be better off with another card. The Gold Delta SkyMiles Credit Card has a $95 annual fee but otherwise has similar rewards-earning potential as the Delta Platinum card.
If you are only worried about the miles and none of the other benefits like priority boarding and free checked bags, you might benefit from downgrading to the new Blue Delta SkyMiles Credit Card with no annual fee.
How to Downgrade a Credit Card from Citibank
Citibank doesn’t have as many restrictions on downgrades as Chase and American Express. The only firm requirement is that you must be a cardholder for at least one year before you can request a downgrade on your current credit card.
If you have the Citi ThankYou Premier Card, you earn three times the rewards points on travel purchases, including gas stations. The card also has a $95 annual fee. If you downgrade to the Citi ThankYou Preferred card, you’ll miss out on earning extra points on travel purchases, but you won’t pay an annual fee.
How to Downgrade a Credit Card from Bank to America
Bank of America rewards credit cards have some of the lowest annual fees for travel rewards cards.
The Alaska Airlines Credit Card has an annual fee of $75 and offers free checked bags for up to six people in your party and one free companion ticket each year. Royal Caribbean and Norwegian Cruise Line even offer Bank of America rewards cards with no annual fee.
If you just want to earn travel rewards, the Bank of America Travel Rewards card does not have an annual fee. You earn 1.5 points for every dollar spent and can redeem your points for travel rewards.
Alternatively, if you don’t want the travel rewards and would just prefer cash rewards, you can downgrade to the Bank of America Cash Rewards card with no annual fee. With this card, you can earn 1 percent cash back on all purchases, 2 percent on wholesale clubs and grocery stores, and 3 percent on gas purchases up to $2,500. So you can take that cash and use it for travel or any other purchase.
Author: Jeff Gitlen
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