Chase has a lineup of awesome credit card offers that provide generous rewards and cool travel perks. Because there are so many good cards that fit different types of budgets and goals, you may find yourself wanting to switch from one Chase card to another. If that's the case, you may be tempted to cancel a credit card.
If this sounds like your situation, there's actually a much better way to change to a new card than to cancel your current card. In fact, canceling your card could do damage to your credit score. Changing to a different credit card from the same credit card issuer is what's known as a "product change." And, depending on your needs, upgrading or downgrading your Chase card could be a far smarter move than canceling altogether.
Here’s what you need to know about how to downgrade your Chase Sapphire Preferred or how to upgrade a Chase Sapphire Preferred to a Chase Sapphire Reserve.
- Why you shouldn't cancel your Chase credit card
- How to downgrade the Chase Sapphire Preferred
- How to downgrade the Chase Sapphire Reserve
- How to upgrade from Chase Sapphire Preferred to Reserve
- How to upgrade from a Freedom card to a Sapphire card
- How to downgrade from a Sapphire card to a Freedom card
- Frequently asked questions
- Bottom line
Why you shouldn't cancel your Chase credit card
Although cancelling a Chase card might seem to make sense if it no longer meets your needs — especially if it’s one of the cards with an annual fee — there are big downsides to closing a credit card account.
First and foremost, canceling your credit card can hurt your credit score. You'll lose the credit available to you on your card, which makes your credit utilization ratio higher. Your credit utilization ratio is the amount of credit you have available versus the amount you are using. So if you have $10,000 in credit available and you have a current balance of $3,000, you are using 30% of your available credit. 30% is about the highest you want your credit utilization ratio to be for a good credit score. Keeping your credit card accounts open, even if you’re not using them, can help your ratio.
In addition, eventually the closed credit card account will drop off your credit record, reducing the average age of your accounts. This also hurts your score as a longer credit history is preferred by lenders and credit issuers.
But if you simply upgrade or downgrade to a different credit card offered by the same issuer, you'll be able to keep your account history and your credit line so no damage to your credit score will occur.
There's also another reason to upgrade or downgrade instead of closing your account if you're talking about Chase credit cards. With Chase, you could run into a problem if you have opened a number of credit cards in a relatively short period of time. That's because Chase applies an informal policy called the 5/24 rule to deny applicants who have opened more than five credit cards over the past two years.
If you apply for a brand new Chase card and run afoul of the 5/24 rule, you probably won't be approved. And even if you haven't opened five cards in the past two years, opening a brand new Chase account will now count as one of your five cards and potentially limit you from qualifying for further credit with Chase in the future.
If you instead upgrade or downgrade and just switch to a different Chase card, you won't use one of your limited five slots when qualifying for the new card because it’s not a new account. This way you can get a card that's a better fit, either because it doesn't charge an annual fee or because it offers rewards or benefits that are better suited to you. You also get to keep any Chase Ultimate Rewards points you've earned so they aren't wasted if you didn't have enough to redeem them for something useful at the time of your account closing.
Some things to know about downgrading your Chase card
If you're a Chase cardholder and you're considering downgrading your card, there are a few things you should know:
- You won't earn a sign-up bonus on your new card. If you switch from the Chase Sapphire Reserve to the Chase Sapphire Preferred, for example, you won't earn the Preferred’s sign-up bonus because you already earned one on your Sapphire Reserve.
- You can't change from a business card to a personal card. Although product-switching is allowed, you have to stay within the same type of card.
- You can't change from a charge card to a credit card. Charge cards require payoff each month; credit cards allow you to carry a balance with interest. You can't swap them out.
- You have to stay within the product family. You can't switch from a co-branded card to a Chase card, and you can't switch among co-branded cards. For example, if you have the World Of Hyatt Credit Card through Chase, you can't just swap it for Chase’s Marriott Bonvoy Boundless Credit Card.
- Your card must have been open for at least 12 months. You can't upgrade or downgrade a card you just opened.
- You probably won't need to undergo a hard credit check. Too many hard inquiries hurt your credit, but you usually won't get one when switching between cards from the same issuer. You should always ask, though, when you request an upgrade or a downgrade, just in case.
- You can keep your card number, rewards, and APR. You will get a new card with an updated expiration date and security code, but your account number won't change and you won't lose any rewards — though the value of the rewards you have might change. For example, with the Chase Sapphire Preferred Card your rewards are worth 25% more when you redeem them for travel through the Chase portal. That is not the case with rewards you earn from a card like the Chase Freedom.
- Your credit line should stay the same. This helps to protect your credit utilization ratio to avoid a negative hit to your score.
- You may be due a refund of your annual fee. If you switch to a cheaper card within 40 days of being hit with your card's annual fee, you should be refunded the money for the fee. If it's been more than 40 days, you'll get refunded a prorated amount based on how long you've had the card during the current year.
How to downgrade the Chase Sapphire Preferred
Despite the fact that it’s well worth paying the Chase Sapphire Preferred’s annual fee of $95, you may decide those particular benefits are no longer of use to you. Although the benefits of the Chase Sapphire Preferred are many, including 2X points on eligible dining and travel purchases, you may decide you'd rather have a different Chase card.
From the Chase Sapphire Preferred, you have several options to downgrade to, including either the Chase Freedom or Chase Freedom Unlimited cards. Although neither of these cards charges an annual fee, you also won't be able to transfer your rewards points to travel partners anymore, and your card's rewards earning structure will change.
If you switch to a card that doesn't offer Ultimate Rewards, try to spend as much of your points as possible in the Ultimate Rewards portal before making the change, as your transferred rewards may have a lower value with your new card.
To request a downgrade, pick which card you want to switch to and then simply call the number on the back of your Chase credit card and ask to make a change. You could also sign into your Chase account and send a secure message to get the process started.
How to downgrade the Chase Sapphire Reserve
The Chase Sapphire Reserve is an expensive card with a $550 annual fee. Like the Chase Sapphire Preferred, though, the Chase Sapphire Reserve annual fee can pay for itself if the card is a good fit for your spending and travel lifestyle. Although the Sapphire Reserve has ample benefits including a $300 annual travel credit, there may come a time when paying for it just doesn't make sense for you anymore.
If this happens, you can downgrade to other Chase cards. You might compare the two Chase Sapphire cards and choose to downgrade to the Preferred, or you might go with one of the Chase Freedom cards. Again, to make the switch you'll simply need to call the number on the back of your credit card and make the request. You'll want to do this within 40 days of being charged the fee annual fee though if you want a full refund for the year.
Again, you'll want to spend your points in the Ultimate Rewards portal before downgrading, as no other card gets as much value in the Chase travel portal as the Chase Sapphire Reserve does. Also try to use as much of your $300 credit for travel purchases as you can during the grace period you have to cancel and still get your annual fee fully refunded.
How to upgrade from Chase Sapphire Preferred to Reserve
The Chase Sapphire Reserve is a much more expensive credit card as it has a $550 annual fee instead of a $95 annual fee. However, it also comes with perks the Sapphire Preferred doesn't offer including up to a $300 statement to reimburse you for travel purchases. It lets you earn 10X points on Lyft rides, 3X points on travel (excluding $300 travel credit), 3X points at restaurants, and 1X points per $1 spent on everything else, which is more than you get with the Preferred. And it offers a 50% bonus when points are redeemed for travel compared to the Preferred's 25% bonus.
If you spend enough that the extra points and the statement credit justify the higher fee, an upgrade may make sense. To switch to the Chase Sapphire Reserve, call the number on the back of your Chase credit card and request it. You'll need to verify your identity and may need to request a credit line increase if your credit limit isn't currently high enough.
You will have to pay the additional annual fee immediately upon making the switch, so be prepared for this added charge.
How to upgrade from a Freedom card to a Sapphire card
Chase Freedom cards are free, but they don't have as robust of a rewards system. That means you don't get a bonus for redeeming for travel through the Chase portal and you can't transfer your rewards to hotel or airline partners. After you use your Freedom card for a while, you may decide you'd prefer to upgrade to either the Sapphire Preferred or Sapphire Reserve.
To upgrade, call the number on the back of your Chase credit card and request a switch to the Sapphire card of your choosing. After answering identifying questions, you can move forward with the process. Depending on your credit limit, this may require requesting a credit line increase. You will also be charged the annual fee for your new card upon upgrading, so you should plan to pay for this cost on your next credit card statement.
How to downgrade from a Sapphire card to a Freedom card
Chase Sapphire cards both come with annual fees that Freedom cards don't. If you decide to downgrade to a free Freedom card, try to spend as much of your rewards in the Chase Ultimate Rewards portal as your points will have a higher value there than after they're transferred to your new Freedom account.
To complete the process of downgrading, simply call the phone number on the back of your Sapphire card and ask Chase to switch you to either the Chase Freedom or Chase Freedom Unlimited. As long as your account has been open for at least 12 months, you should have no problem.
If you want the full annual fee refunded to you, though, you should make the call to request the card change within 40 days of the fee being charged. Otherwise, you can only get a prorated refund.
How to handle your Chase Ultimate Rewards points
Chase Ultimate Rewards points can be worth more, depending on which Chase card you have and whether you redeem through the Ultimate Rewards portal for travel. You should aim to spend your points before you downgrade to a card that doesn't offer bonuses on travel redemptions because, though you can take them with you, they won't be worth as much.
You could also opt to transfer your points to a Chase travel partner to preserve their value. Once you switch to a different card such as a Freedom Card or a Chase Slate card, you won't be able to transfer them to partners anymore.
Frequently asked questions
How much do you have to spend to make the Chase Sapphire Preferred worth it?
The Chase Sapphire Preferred has a $95 annual fee so you need to spend enough to justify the cost. When points are redeemed through the Ultimate Rewards portal, you get a 25% rewards bonus, so points are worth about 1.25 cents each. If you spend just $3,800 on travel or dining, you'll cover the fee.
You also qualify for trip cancellation insurance and auto rental collision damage waiver. Avoiding fees for car rental insurance or travel insurance can also help you to cover the fee if you take several trips per year you'd otherwise need to buy coverage for.
How much do you have to spend to make the Chase Sapphire Reserve worth it?
The Chase Sapphire Reserve’s annual fee of $550 is partially offset by the $300 statement credit for travel purchases, provided you use the credit in full. Complimentary airport lounge access is also a valuable perk, as buying access to an airport lounge could cost you $40 to $50 per person or more. If you use these perks on several trips, you can make up for the fee even without the bonus points you get for purchases.
Will Chase ever waive annual fees?
Chase waives annual fees for active-duty members of the military (and so does American Express). If you are not in the armed forces, you can ask the card issuer for a fee waiver but may not be successful. You have a better chance if you have a high income and spend a lot on your card during the year.
Should I get the Chase Freedom or Chase Freedom Unlimited?
Deciding between the Chase Freedom Unlimited vs. Chase Freedom isn’t always easy. The Chase Freedom Unlimited card provides unlimited 1.5% cash back on all purchases; the Chase Freedom offers 5% cash back in rotating bonus categories (up to $1,500 in combined purchases per quarter) and 1% cash back on all other purchases.
Currently, the Chase Freedom also offers an intro APR of 0% on balance transfer for 15 months after account opening.
If you'll remember to activate your quarterly bonus and tend to spend within the bonus categories, the Freedom can be a better deal. But if you don't want to be bothered keeping track of rotating bonuses or tend to spend on all different kinds of things not included in the bonus categories, the Freedom Unlimited may be a better choice.
With so many great Chase rewards credit cards, there's often little reason to cancel one just because it no longer works for you. In fact, doing so could do damage to your hard-earned credit score. Instead, consider upgrading or downgrading to a different Chase credit card that is better suited to your needs.
#1 Travel Rewards Card
- 60,000 point sign-up bonus
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- 3X points with Instacart (up to $3,000), and at gas stations (up to $1,500) from July 1, 2020 to September 30, 2020
- 2X points on eligible dining and travel purchases
- 25% more value when redeeming rewards for travel through Chase Ultimate Rewards
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