When Can I Downgrade My Credit Card Account?

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TPG reader Paul emailed me to ask about the timeline for downgrading a credit card:

“My wife and I both have the Chase Sapphire Preferred, but we were thinking of downgrading her card to the Chase Freedom Unlimited for the higher base earning rate. Her account is only a few months old; can she downgrade immediately, or does she have to wait?”

Credit card sign-up bonuses and benefits are huge assets to award travelers, and learning how to manage each account individually can help you maximize them together. Downgrading a credit card (rather than canceling it outright) is a great way to protect the rewards you’ve earned and keep that account active on your credit report to improve your FICO score. Understanding how downgrades work and when your account is eligible can help you decide how to proceed if a card is no longer needed.

Paul and his wife both have the Chase Sapphire Preferred Card, and while that’s one of my favorite travel rewards cards overall, there’s not much advantage in having two in the same household. If one of them downgrades to the Chase Freedom Unlimited Card, they can earn 1.5 Ultimate Rewards points per dollar on all purchases and still get Sapphire Preferred benefits like access to transfer partners and primary car rental insurance. I think this would be a good move, but it might have to wait.

The Credit CARD Act of 2009 restricts card issuers from changing certain terms (like interest rates and annual fees) within one year of when you open an account. There are some exceptions — like at the end of a promotional 0% APR offer — but in most cases, you can’t alter the terms of your account even if you want to. As a result, you typically can’t downgrade or upgrade a credit card in the first 12 months. That means Paul and his wife will have to wait if they want to change her card to another product.

One easy solution would be to downgrade Paul’s card instead, assuming his account is more than one year old. This would serve the same purpose, since you can share Ultimate Rewards points easily with other members of your household. If your finances are intertwined, then it doesn’t matter much whose name is on each account. So long as you have the two cards between you, in this case you’ll both have access to the benefits.

You can share Ultimate Rewards points for access to transfer partners like British Airways.

Another solution would be to just apply for the Freedom Unlimited Card separately. On one hand, you’d add a new inquiry to your credit report and lower the average age of your accounts. On the other hand, you’d be eligible for the sign-up bonus, which is currently $150 (or 15,000 points) after you spend $500 on purchases in the first three months from account opening.

I also suggest taking a look at Chase Freedom as another downgrade option. The Sapphire Preferred and Freedom Unlimited are a great combination for beginners, but the regular Freedom card might have greater earning potential depending on your spending habits.

For more on product changes and earning rewards as a team, check out these posts:

If you have any other questions, please tweet me @thepointsguy, message me on Facebook or send me an email at info@thepointsguy.com.

The best beginner points and miles card out there.
Chase Sapphire Preferred® Card

With great travel benefits, 2x points on travel & dining and a 50,000 point sign up bonus, the Chase Sapphire Preferred is a great card for those looking to get into the points and miles game. Here are the top 5 reasons it should be in your wallet, or read our definitive review for more details.

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More Things to Know
  • Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
  • Chase Sapphire Preferred named "Best Credit Card for Flexible Travel Redemption" - Kiplinger's Personal Finance, June 2018
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • No foreign transaction fees
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
  • No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards
Intro APR on Purchases
Regular APR
17.99% - 24.99% Variable
Annual Fee
$0 Intro for the First Year, then $95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent Credit

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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