Downgrade your credit card to go annual fee-free

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With the current situation putting travel on hold for at least the rest of 2020, many readers are thinking of ways to trim their credit card portfolios. However, rather than cancelling an account, it often makes sense to downgrade / product change to a card with no annual fee. To be clear, I’m not suggesting that you should downgrade every card in this post, but rather listing some of the most popular travel cards that can be downgraded as well as their best downgrade paths. Some banks offer far more product change options than others (several readers commented over the past few days to note that they didn’t realize you could product change a Citi AA card to a Double Cash for instance). In this post, I’ll list some reasons to consider downgrading versus cancelling as well as sensible downgrade paths for some of the most popular travel cards that may be on the chopping block.

Downgrade or cancel?

Some readers likely aren’t aware of all of their downgrade/change options. In some cases, the downgrade options are very minimal, but in others they may be more abundant. Sometimes, the right answer is just to cancel, but many times you may be better off product changing.

There are several reasons why you might consider a downgrade / product change rather than canceling:

  1. To keep points alive. With Citi, even if you have your points pooled with another card that earns Thank You points, any points you’ve earned with a card you close will expire after 60 days. With Chase, one could make the mistake of forgetting to move points before cancelling (though at least with Chase if you move them first (before closing) they will not expire). Product changing can help keep points alive.
  2. To keep benefits. Some key card family benefits are extended to even fee-free downgraded versions of the card. For example, a popular feature of the United credit cards is expanded award availability. You can get that same expanded availability even with a United card that has no annual fee. There are other similar situations (some covered below).
  3. To keep a path to upgrade back. You may prefer to downgrade rather than cancel to maintain a path to upgrade back to the card you currently have. For example, if you have the Ritz-Carlton credit card and don’t want pay the $450 fee this year because of the current situation but you think you may want it again in the future, you may consider downgrading to a Marriott card with a $95 annual fee so that you may be able to upgrade to the Ritz card again in the future since the Ritz card is no longer available for new applicants and you may not be eligible for a new Marriott credit card soon because of Chase’s 5/24 rule or the confusing Marriott credit card rules.
  4. To get some other benefit / category bonus. In some cases, there may be a card with no annual fee that earns a specific category bonus that could be more beneficial than the card you currently have.

On the other hand, in some cases it might make more sense to cancel. Here are a few reasons you might rather cancel:

  1. You want to free up an available card slot. Amex generally only allows you to have 5 credit cards (charge cards, like the Gold/Platinum/etc are not subject to this limit). If you want a new credit card and you already have 5 open with Amex, you’ll likely have to close one.
  2. You don’t want/need any of the downgrade options. Know that having two of the same card isn’t a problem with most issuers and can be beneficial in some cases as noted under the various issuers below. Still, in some cases you won’t have use for a downgraded card and may therefore prefer to cancel.
  3. You want to increase the odds of automatic approval. There’s no hard-and-fast data here, but anecdotal experience of some suggests that perhaps your odds of automatic approval increase with some issuers if you close an account or reduce credit limits before applying for a new card. That said, closing a card or reducing limits offers no guarantee and you may alternatively be able to offer those solutions to a recon rep to get a new card opened…if you didn’t already do them in advance. I wouldn’t probably cancel for this reason.
  4. You just want to keep it simple. One less card in your stash is one less card to track.

Whether to downgrade or cancel will be a highly situational choice. See each issuer below for an overview of popular downgrade paths.

The Universal Truths of downgrading credit cards

Citi's new rules

A couple of key things to note about product changing that are constant or near-constant across banks:

  • You will not get a new cardmember bonus when you downgrade or product change. Amex is a notable exception here as they sometimes offer a targeted bonus for upgrading, but there is no bonus for downgrading. Chase has sometimes offered small incentives for upgrading older discontinued cards to their newer more expensive versions, but not for downgrading.
  • You can not change a business card to a personal one or vice versa. I am not aware of any bank that allows this.
  • Citi allows product changes from a co-branded card to bank points or vice versa, but most banks do not allow changes across different brands. That is to say that Amex won’t let you change a Hilton card to a Delta card and Chase won’t allow changing a United card to a Hyatt card or an Ultimate Rewards card. Citi is a notable exception.
  • You typically need to have had your account open for 12 months or more before product changing.

On to downgrade paths for particular cards.

Cards that are eligible for downgrade and their best downgrade options

American Express

Key rules:

  • You can’t change a credit card to a charge card or vice versa
  • Co-branded cards have to stay in the co-brand family of cards (i.e. a Hilton card can only be changed to another type of Hilton card, not to an Everyday Preferred)
  • You will not be eligible in the future for the welcome bonus on either the card you change from or the card you change to. Amex lifetime language (present on most new applications) dictates that the welcome bonus is not available to you if you have or have had the card before (regardless of whether or not you received a bonus).

American Express downgrade options include:

Everyday Preferred:
  • Downgrade the Everyday Preferred to the Everyday credit card. This card has no annual fee and preserves the ability to transfer to airline and hotel partners.
Hilton Aspire or Hilton Surpass

An added bonus of downgrading Amex cards rather than cancelling is that Amex sometimes offers targeted upgrade bonuses that often do not have lifetime language restricting you from earning the upgrade bonus. In the future, you may get a chance to upgrade back to the card you previously held and earn some bonus points for doing it.

But what about the Gold or Platinum cards?

The Amex Gold ($250 annual fee) and Amex Platinum card ($550 annual fee) are expensive cards to hold, though their high annual fees can be offset by certain card benefits. The incidental credits aren’t what keeps them off of the downgrade list though. Unfortunately, there just isn’t a good downgrade option from those cards to my knowledge. You could downgrade to the Amex Green card, but it still carries a $150 annual fee. That’s probably not enough cheaper than the Amex Gold card to consider dropping its 4x bonus categories.

Update: Greg pointed out to me that one may want to downgrade the Platinum card because Amex has been known to pro-rate the annual fee when downgrading even during the middle of a cardmember year (though you may have to ask them to do this). That might make it worth doing if you’re looking to save money now and to be able to upgrade back to the Platinum in the future without sacrificing a 5/24 slot.

While Amex did enhance the Green card last year, I think anyone whose main objective is to dump a high annual fee would be better off using an Amex Everyday card or Blue Business Plus card as a no-annual-fee option for keeping Membership Rewards points alive. Since those are both credit cards, you can not downgrade a Gold or Platinum card to them.

Bank of America

Almost any BOA card

Note that I am not familiar with BOA product change availability on business credit cards. If anyone has recently downgraded a business card, let us know in the comments what options were available to you.

Barclays

Barclays has apparently offered downgrade bonuses in the past, though I haven’t heard of anything like that in years. I believe that Barclays requires you to stay in the same card family for downgrades, so these would be your options:

Aviator Red
  • Downgrade to the AAdvantage Aviator Mastercard. This card isn’t available for new applications, but one can downgrade the Aviator Red to this card to avoid the annual fee. The card earns 1 mile per $2 spent, so you wouldn’t want to spend on it.
JetBlue Plus Mastercard
  • Downgrade to the JetBlue Card, which has no annual fee. The card gets a 50% savings on in-flight purchases and earns 2x grocery and restaurants, so it isn’t a total lemon if you like flying JetBlue and want to save on the fee.
Wyndham Rewards Visa (with the $75 annual fee)
  • Downgrade to the Wyndham Rewards Visa that has no annual fee. I’d caution against this though if you have the old version of the $75 fee card which comes with 15K points at anniversary and earns 2x everywhere since you won’t get those benefits back if you upgrade again in the future. If you have the newer version of the card that only gets 6K points at anniversary and only earns 2x on gas, utility, and grocery, you could downgrade to save on the fee.

Chase

Key rules:

  • Can’t change between a co-branded card (like Hyatt, Marriott, United) and another co-brand or Ultimate Rewards. You have to keep changes within the same family of cards.
  • While you can not open a new card if you currently have that same card, you can downgrade to have a second instance of the same card. As an example, imagine that Sally has a Freedom card and a Sapphire Reserve card. She can not apply for a new Freedom card since she currently has one. However, she can downgrade her Sapphire Reserve to a second Freedom card.
Chase Sapphire Reserve or Chase Sapphire Preferred
  • Three downgrade options that each have no annual fee: to the Chase Freedom, Freedom Unlimited, or the plain Chase Sapphire card. Whether you prefer the Freedom card’s rotating categories or Freedom Unlimited’s 1.5x everywhere will depend on your other cards.

Chase Ink Business Preferred (or the no-longer-available Ink Plus)

  • Downgrade to a Chase Ink Business Cash or Chase Ink Business Unlimited. Whether you prefer the 5x bonus categories of the Ink Cash or the 1.5x-everywhere structure of the Ink Business Unlimited likely depends on whether you have a Freedom Unlimited. If you do have a Freedom Unlimited, it probably makes more sense to downgrade to an Ink Cash.
IHG Rewards Premier card
  • Downgrade to the IHG Rewards Club Traveler card. This card has no annual fee and retains the ability to get the 4th night free on award stays. It has no annual free night certificate.
Mileage Plus Explorer or United Club card
  • Downgrade a United credit card to the United Mileage Plus card, which has no annual fee. This United credit card is no longer available to new applicants, but it is possible to downgrade to it. It only earns 1 mile for every $2 spent, so you won’t want to use it to make purchases, but it still offers the same expanded award availability that its annual-fee-carrying cousins offer.

Citi

Citi is a notable exception in terms of product change rules in that you can generally product change to any other Citi card, even some that are no longer available, as long as your account has been open for at least 12 months. You do not need to stay in the same card family. That is to say that you could downgrade a Citi American Airlines Platinum Select credit card to a Double Cash or possibly even a Costco Anywhere Visa card. Note that you’d need a Costco membership for this.

Your best downgrade options are:

Citi American Airlines credit cards
  • Citi Double Cash. This card has no annual fee and earns 2% cash back which can be converted to 2x ThankYou points if you also have a Thank You points-earning card. You’re not giving up much by product changing to the Double Cash since the card usually offers no welcome bonus. Your best bet would be product changing to this from an American Airlines credit card. Keep in mind if you downgrade from a ThankYou card like the Prestige or Premier, the ThankYou points earned on the downgraded card will expire since the Double Cash does not earn ThankYou points but rather cash back that is convertible to ThankYou points.
  • Citi Costco Anywhere Visa. Note that I do not believe it is possible to change the Citibusiness AA card to the business version of this card, but data points indicate that the personal AA cards can be product changed to the Costco Anywhere Visa, which has no annual fee and offers 4% back on gas on up to $7K spend per year and 3% back on travel and dining. Note that you need to be a Costco member to get this card.
  • American Airlines AAdvantage MileUp Card. If you want to keep earning American Airlines miles, the MileUp card offers 2x at grocery stores and has no annual fee and not enough welcome bonus to ever consider applying for it new.

Note that you can additionally product change to the ThankYou cards noted in the next section since Citi more or less allows a product change to anything in most cases.

Citi Premier or Citi Prestige

Note: Do not downgrade a Premier or Prestige to a Double Cash. Doing so will cause the ThankYou points earned from that card to expire. See: Cancelling your Prestige or Premier Card? Here’s how to keep your ThankYou points alive.

US Bank

Radisson Rewards Premier Visa Signature
  • Radisson Rewards Visa. Note that there are several different Radisson credit cards. If you have the Premier Visa Signature and don’t want to pay the $75 annual fee, you could downgrade to the Radisson Rewards Visa which has no annual fee. With the no-fee card, you’ll only earn 1x on most purchases but can still earn annual free night certificates with $10K spend (up to $30K per year). I wouldn’t do that at 1x, but it’s possible.

Bottom line

While the options above likely represent your best options if you want to downgrade and get rid of an annual fee, but you may also have upgrade and downgrade options that carry an annual fee but offer a valuable benefit to you. Also keep in mind that not every bank rep will be as well versed in your options as you are. In some cases, you may simply need to HUCA (Hang Up, Call Again) and speak to a different rep to get it done (for example, we had a report or two from a reader who reached as Chase rep and didn’t know about the no-fee Mileage Plus credit card, but hanging up and calling again led to an agent who did). Finally, be aware that phone resources for most of the banks are pretty limited right now and are resulting in really long hold times or even a recording simply saying to call back later in some cases. If your product change isn’t imminently necessary to avoid an annual fee, you may consider waiting until it is. You may also try calling very late or early to try to “beat the rush”, but the hours when reps are available to make these changes may vary.

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SteveH
Guest
SteveH

I wish I knew about the Thank You points expiration before I downgraded my Prestige to Double Cash. The rep definitely misinformed me about that but it wasn’t enough points to fight over at the time…although it was almost enough for a one way ticket to Hawaii

Harry Bloom
Guest
Harry Bloom

Barclay AA Aviator Card. This card has a $99 annual fee. Since we have not traveled much this year and do not expect to fly until at least 2021 (COVID-19), I contacted Barclays to see if there were options like a fee waiver or downgrade to a no fee card. The answer was an emphatic NO. Especially interesting since Barclays is a UK based organization I believe. Basically its a cancel or pay choice. Any suggestions? Regards, and stay safe please. Harry

Pam
Guest
Pam

I have the business card (got a yr ago), they just offered to waive the AF for 1 yr but next yr will be charged. Had to pay the fee firstc though cos not applied til the following mth.

MariaN
Guest
MariaN

What are the odds Chase will allow a Chase Sapphire Reserve cardholder to downgrade to a fee free card to save the $450 fee, then let’s say a year later when international travel opens up (post-vaccine) they would autoapprove a request for a REVERSE move, ie upgrading back to the CSR? (acknowledging they’d likely start charging me $550 instead of $450 annual fee after upgrading, but it would take 4 1/2 years to justify holding the $450 fee CSR instead of the above downgrade-then-upgrade path to break even)

Al P
Guest
Al P

I believe your credit score may take a hit for cancelled cards regardless of why or who cancelled.. Sound correct ?

rich
Guest
rich

While this isn’t true for the very FFs, I think too many people get cards for the sign up bonus and then don’t bother to cancel the card either because they are lazy, or because they like the status even though dollar wise it makes no sense to keep it.

For example, I currently have the Aspire card and was getting use of the $250 resort credit because I used to live in Scottsdale and would visit 3+ times yearly and generally stayed at Hiltons.

Now it doesn’t make sense because I am living in Scottsdale full time so I don’t use the resort credit and with the current situation, I can’t imagine using that credit for a few years. Not to mention that the Diamond status gets you very little and I can keep Gold via the Platinum card which gives you the key free breakfast perk.

I’m curious, if Hilton extended my Diamond status due to the virus situation, but I cancel the Aspire card, would my status stay as Diamond?

Doesn’t really matter much since I’m unlikely to use it for quite some time.

Mark P
Guest
Mark P

Is there a no-fee option to downgrade to from the United BUSINESS card?

LFC
Guest
LFC

I’d like to know this too. My annual fee just posted and I will cancel it if there isn’t thing to downgrade to.

NK3
Guest
NK3

Great article! A few additional reasons to consider downgrading:

1. Get multiples of cards. Chase won’t let you apply for a second Freedom card if you have one, but if you have a Freedom card and a CSR or CSP, you can downgrade the Sapphire card to a second Freedom card. During quarters with a good bonus category (such as PayPal, etc), this will allow you to get up to $3K in spend.

2. More cards, (potentially) more deals. It is not uncommon for card companies to send out a targeted spend offer or two each year per card. Some are definitely better than others, of course. But on no annual fee cards (obtained via downgrading), last year Citi offered me $15 off of $75 spent on Amazon on my Rewards+, and $25 off of $75 spent using Paypal on my ATTA card. Not exactly life changing, but an easy $40 on stuff I would have bought anyways. Anyone familiar with Amex offers can attest that certain deals will only show up on specific cards. I have found deals specific to my no annual fee, downgraded cards. These are not a guarantee, obviously, but I have gotten deals in the past with these. On occasion, Citi has even offered retention bonuses on no annual fee cards like ATTA.

John Y
Guest
John Y

Can I downgrade my Citi AA Business card to the Citi Double Cash? I know you can do it for the personal card but no one mentions if it works for the business card.

Greg The Frequent Miler
Admin

No, you can’t product change from business to consumer or vice versa.

Lisa
Guest
Lisa

Called to downgrade my Amex Platinum. The downgraded my authorized users to gold and refunded the $175 and then offered me $300 or 30,000 points for 4K of spend in 3 months as a retention bonus. Took the points.

Jan W
Guest
Jan W

Thanks, Nick. Just what I was looking for! Also, is it safe to assume that upgrading is almost always an easy option down the road?

Cj R
Guest
Cj R

I would’ve like to downgrade my citi AA card but my fee was due and citi reps were not answering the phone. I called maybe 3 times and tried the chat option over the course of 2 weeks. I eventually had to cancel the card via the automated phone service 3 days before my payment was due.

Veer
Guest
Veer

Earlier this year I received an offer to upgrade Everyday to Everyday preferred. I took the offer and received the bonus and now the AF has hit. Should I downgrade to Everyday? Will I lose bonus points ?

A K
Guest
A K

My experience with the Barclays Jetblue Plus card was that one isn’t necessarily permitted to downgrade to the no fee card. A friend of mine put heavy spend on it and successfully downgraded. Not wishing to cancel the card, I tried to downgrade 2 years in a row (very little spend) but each time I called the agent told me that they “don’t see a downgrade offer.” I HUCA each time but no improvement. I ended up cancelling the card.

ffi
Guest
ffi

I would not be so sure that you can get back the Chase Ritz card after downgrade to a no fee card
I have an old United card and was told that if I wanted it again it was not possible as it was no longer offered
Do you have data points for downgrading and upgrading back to the Ritz card?

Pronto
Guest
Pronto

Like others have mentioned in the comments, I also did not have success downgrading a Barclays card (the Wyndham card). Tried 2x over a week and both times was told there were no offers available so cancelled. Seems like this might be a trend for Barclays.

One question I don’t see explicitly answered above is: If I downgrade the Citi AA personal card to the AA MileUp card (with no AF), will that prevent the AA miles earned on the bonus from expiring?
Thanks!

Allan
Guest
Allan

In February, when my Amex Platinum came up for renewal, I accepted a retention offer of a $200 statement credit for spending $3000 within 90 days. Given the present situation, I am receiving absolutely zero benefit from this card – from 5x on plane tickets which is my main use to the Uber credit, hotel status, airline fee credit etc., etc. I called Amex and asked what they would be willing to do and they told me I received an offer in February. Well, the offer I accepted was premised on being able to use the card in a normal world, not in a COVID-19 world. I am just shy of reaching the $3k spend and the credit. I was thinking of canceling the card once I receive the credit, but the agent told me if I cancel the card, the $200 would be clawed back. Is there any solution you can suggest?

GregR
Guest
GregR

@Nick or Greg, does Citi still have their SUB restrictions within a family of cards to where one would be better off cancelling to restart the clock? Are there reasons not to downgrade any bank’s cards due to that downgraded card tracking back to the original card and preventing you from getting another SUB on another instance of that card?

I downgraded a Citi Premier in June of 2017 to a Rewards+ card but then foolishly signed up for a new Citi Premier in early 2019, thinking I was safe since I got my previous Premier in 2015. Turns out I violated Citi’s rules that you “cannot get a bonus on a new ThankYou Rewards card if you have received a bonus or cancelled the same card or another card in the same family within the past 24 months.” (Source: https://frequentmiler.boardingarea.com/citi-thankyou-rewards/) Citi gave me 1k in pity points when I asked why I didn’t earn the 50k SUB after meeting $4k in spend. Ouch!

Greg The Frequent Miler
Admin

Cancelling a card resets the clock. The only way to avoid that is if you downgrade within the family. In that case, as long as you’re not issued a new card number, it won’t reset the clock. When you call to downgrade, you can ask them if it will cause you to get a new number. That’s the only way to know.