A nagging question lingered: was the card still worth the cost? One woman faced a dilemma with her premium travel card, its annual fee having significantly increased. She wasn’t convinced the new benefits justified the expense, but decided to postpone a decision, hoping to maximize its value before May, when the fee would be due.
Canceling a credit card isn’t always the wisest move. While it seems straightforward, it can negatively impact your credit score. A canceled card reduces your overall credit line, potentially increasing your credit utilization ratio – a key factor in credit scoring.
Downgrading offers a smarter alternative. Unlike cancellation, downgrading doesn’t register as a new account with credit bureaus, protecting your standing with the crucial 5/24 rule, which limits new card approvals. It’s a way to retain benefits without the hefty annual price tag.
But what happens to accumulated rewards? Canceling a card typically means forfeiting any remaining points. These points, however, hold real value – they can unlock incredible travel experiences through Chase Travel, or be transferred to valuable airline and hotel partners like Air Canada Aeroplan or World of Hyatt.
Downgrading isn’t without its own considerations. Chase requires you to remain within the same card “family” during a downgrade. You can’t, for example, switch from a travel rewards card to a co-branded hotel card.
The Chase Sapphire Preferred® Card emerges as a popular downgrade option. It offers a more accessible $95 annual fee while still providing valuable travel rewards, access to transfer partners, and essential travel protections like primary rental car insurance.
Even if you’ve previously held the Sapphire Preferred, you won’t be eligible for a new welcome bonus. However, Chase now allows cardholders to hold both the Sapphire Reserve and Preferred simultaneously, offering greater flexibility.
For those seeking to eliminate annual fees entirely, downgrading to a no-annual-fee Chase card like the Chase Freedom Unlimited® or Chase Freedom Flex® is a viable path. Your hard-earned points won’t vanish; they can still be redeemed for travel or cash back.
Points transferred to these no-annual-fee cards aren’t lost forever. They can be moved back to an Ultimate Rewards-earning account in the future, opening the door to transferring them to Chase’s airline and hotel partners for maximum value.
Ultimately, the decision hinges on individual spending habits and travel goals. If the annual fee of the Chase Sapphire Reserve feels excessive, downgrading to a more suitable Chase product safeguards your credit and preserves the value of your rewards.
Protecting your credit line and retaining your points are paramount. Downgrading, rather than canceling, offers a strategic solution for those re-evaluating the benefits of their premium credit cards.
