Canceling a credit card can damage your credit, but you can improve your credit by upgrading or downgrading your Chase Sapphire card.
How To Downgrade Chase Sapphire Preferred? There are a number of great credit card deals from Chase, including those with excellent rewards programs and enticing travel benefits. Because there are so many travel credit cards and rewards cards to choose from, you may find yourself wanting to move from one Chase card to the next. A credit card cancellation might be an option if that is the case.
If you’re in this situation, there’s a better option than canceling your current card: switching to a new one. Your credit score may suffer if you cancel your card. A “product change” occurs when you switch from one credit card provider to another. You may be better off upgrading or reducing your Chase card than canceling it completely, depending on your needs.
To downgrade your Chase Sapphire Preferred or to upgrade your Chase Sapphire Preferred to a Chase Sapphire Reserve, follow the steps outlined below.
Why Canceling Your Chase Credit Card is Not a Good Idea
A Chase credit card cancellation may seem reasonable if your circumstances have changed and you no longer need it, especially if it’s one of the cards with an annual fee, but there are significant drawbacks to doing so.
Canceling your credit card will, first and foremost, have a negative impact on your credit report, which will decrease your overall available credit line in the future. Your credit usage ratio will rise as a result of losing the available credit on your card. It’s the ratio of your available credit to the amount of credit you’re actually using.
So, if you have a credit limit of $10,000 and a balance of $3,000, you are utilizing 30% of that limit. A decent credit score necessitates a credit usage percentage of no more than 30%. Even if you don’t use your credit cards, keeping them open can improve your debt-to-income ratio.
You can also lower your average age of credit accounts by closing a closed credit card account. You lose points because lenders and credit card companies favor borrowers who have a longer credit history.
It is possible to preserve your credit history and credit line by just upgrading or downgrading to a different credit card from the same issuer, so there will be no negative impact on your credit score.
If you’re talking about Chase credit cards, there’s another incentive to upgrade or downgrade rather than close your account. If you’ve opened a lot of credit cards in a short period of time, you may have a problem with Chase. Applicants who open more than five credit cards in the preceding two years are denied by Chase because of an informal policy known as the 5/24 rule.
In most cases, you won’t be approved for a new Chase card if you violate the 5/24 rule during the application process. Even if you haven’t acquired five credit cards in the last two years, creating a new Chase account will count as one of your five cards and may prevent you from obtaining more credit from Chase in the future.
If you just move to another Chase card instead of upgrading or downgrading, you won’t be able to utilize one of your five available qualifying spaces for the new card because it is not a new account. A credit card that doesn’t charge an annual fee or offers rewards or features that are more suited to your needs can be obtained by doing so. The Chase Ultimate Rewards points you’ve accrued will also be yours to retain, even if you didn’t have enough at the time of your account closure to redeem them for a reward.
Reducing Your Chase Credit Limit: What You Need to Know
A few things to keep in mind if you’re a Chase cardholder and are thinking about downgrading your card:
- On your new credit card, you won’t be eligible for a sign-up bonus. The sign-up bonus for the Chase Sapphire Preferred is not available if you move from the Chase Sapphire Reserve because you have already earned one on the Reserve.
- Changing from a business to a personal card is not possible. A change in product kind is permitted, but you must stick with the same card type.
- Changing from a charge to a credit card is not possible. Credit cards, on the other hand, enable you to carry an amount that accrues interest, but you must pay it off each month. They are inseparable.
- There is a limit to the number of products you may sell. Co-branded cards can’t be switched to Chase cards, and you can’t transfer co-branded cards to Chase cards. If you hold the World of Hyatt Credit Card from Chase, you can’t just switch to the Marriott Bonvoy Boundless Credit Card from Chase.
- You must have had your credit card for at least a year to qualify. A card you’ve just opened can’t be downgraded or upgraded.
- Hard credit checks are unlikely for you. When transferring between cards from the same issuer, you’re unlikely to face a hard inquiry on your credit report. Whenever you want an upgrade or a downgrade, be sure to inquire first, just in case.
- Retain your credit card number and APR. However, you will receive a new card with a new expiration date and security code, but your account number will not change and you will not lose any points – though their value may alter. Your rewards are worth more if you redeem them through the Chase gateway, such as the Chase Sapphire Preferred Card. Rewards on a card like the Chase Freedom don’t work that way.
- Your credit limit should remain the same for the foreseeable future. As a result, your credit usage ratio will not be negatively affected.
- An yearly fee refund might be yours. You should be reimbursed for the annual fee if you switch to a lower-cost card within 40 days after being charged. If you’ve had the card for more than 40 days, you’ll get a prorated refund based on the length of time you’ve had it.
Chase Sapphire Preferred Downgrade Instructions
Despite the fact that the $95.95 annual charge for the Chase Sapphire Preferred is certainly worth it, you may come to the conclusion that these specific perks are no longer useful. Even while the Chase Sapphire P
Despite the fact that the $95.95 annual fee for the Chase Sapphire Preferred is certainly worth it, you may come to the conclusion that these specific perks are no longer useful. Even while the Chase Sapphire Preferred offers a slew of perks, like double points on non-Ultimate Rewards travel expenditures, you might choose another Chase card instead.
You can downgrade from the Chase Sapphire Preferred to the Chase Freedom or the Chase Freedom Unlimited card, among other alternatives. In addition to the loss of the ability to transfer points to travel partners, both of these cards will have a new reward earning system that does not levy an annual fee. The downgrade to a card like the Chase Freedom Flex or the Chase Freedom Unlimited card will also mean you will be subject to foreign transaction fees. A foreign transaction fee is an additional cost that is associated when spending money overseas.
It’s best to use up as many of your Ultimate Rewards points as possible on the Ultimate Rewards site before transferring them to a card that doesn’t provide Ultimate Rewards. Select the card you wish to switch to and call the number on the back of your Chase credit card to ask to make a change to seek a decrease. After logging in, you may begin the procedure by sending a secure message to the customer service department at Chase.
How to Downgrade the Chase Sapphire Reserve
The annual fee for the Chase Sapphire Reserve is $550. Even if the Chase Sapphire Reserve annual fee isn’t worth it for your purchasing and travel habits, it might still pay for itself in the long run. Paying for the Sapphire Reserve may no longer make financial sense for you, even if it offers several perks, such as a $300 yearly travel credit.
It’s possible to switch to another Chase card if this happens. Alternatively, you might compare the Chase Sapphire Preferred and the Chase Freedom cards and decide to downgrade to Preferred. Call the credit card company at the number on the back of your card to request a change. If you want a complete refund for the year, you must cancel within 40 days after being charged the yearly price.
The Chase Ultimate Rewards site is the best place to spend your Ultimate Rewards points before downgrading since no other card offers as much value in the Chase travel portal. During the grace period in which you can cancel your membership and receive a full refund of your yearly fee, utilize as much of your $300 credit on travel purchases as possible.
How to Upgrade from Chase Sapphire Preferred to Reserve
The Chase Sapphire Reserve includes a $550 annual fee instead of a $95 annual charge, making it a more premium credit card. In addition, the Sapphire Preferred card does not offer incentives such as a $300 trip reimbursement statement credit. In comparison to the Preferred card, you may earn 10 times the points on Lyft rides, Chase Eating purchases, and Ultimate Rewards hotel and auto bookings; 5 times the points on air travel; 3 times the points on both travel and dining; and 1x the points for $1 spent on everything else. When you redeem your points for travel, you get a 50% bonus instead of a 25% benefit with the Preferred.
An upgrade may make sense if you spend enough to warrant the additional points and the statement credit. Using the phone number on the back of your Chase credit card, you may switch to the Chase Sapphire Reserve and get the benefits. If your credit limit isn’t high enough, you may need to seek an increase in your credit limit. Make sure you have enough money saved up to cover the higher annual fee if you decide to switch providers.