When a Credit Card Product Change Makes Sense

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When it comes to credit cards, the only constant is change, as new products are always being introduced. Thankfully, issuers offer something called a product change that can help you to maintain the right combination of travel rewards cards at all times. In today’s post, I’ll explain what a product change is, and how you can use this option to your advantage.

What is a product change?

Have you ever called to cancel a card, only to be offered a different card instead? When a representative hears that you’re closing an account because of its annual fee, they might offer you a similar, no-fee version as an alternative. If you accept that offer, you’ll actually be retaining the same account, but it will now operate under the terms of a different product type. Asking for a product change is also very easy; you can simply call the card issuer and ask for one, or you can contact a representative via the issuer’s secure message center.

A product change lets you maintain your existing account, while enjoying the benefits and terms of a different card. In addition, requesting a product change doesn’t require opening a new account, or performing a credit check, also known as a “hard pull.” Finally, some card issuers will even offer a pro-rated refund of your annual fee when you downgrade to a card with a less expensive annual fee or none at all.

In the credit card industry, each type of credit card is referred to as a product. For example, though the Chase Freedom and Chase Freedom Unlimited have similar names, these are considered to be two entirely different products. You can change your product and still retain the account number, balance and due date of your old product. In fact, you can continue to use your old card before and even after you’re issued a new card with the name of the new product. For example, I changed my Chase Sapphire Preferred Card to a standard (no-fee) Sapphire, but I was able to continue using the Sapphire Preferred’s metal card to make charges to my account, which now had the terms of the standard Sapphire.

When should you consider a product change?

If you have the recently introduced Sapphire Reserve, you might want to request a product change for your Sapphire Preferred.
If you have the recently introduced Sapphire Reserve, you might want to request a product change for your Sapphire Preferred.

Once you know that it’s possible to change products while retaining the same account, it brings up several interesting possibilities to benefit from this technique:

Product upgrades — When a new product is introduced, most people will try to apply for a new account in order to earn the sign-up bonus, such as the 100,000-point offer for the new Chase Sapphire Reserve Card. But if you’re unable to qualify for a new account due to having opened too many accounts, you might consider upgrading one of your existing products to the Sapphire Reserve in order to take advantage of its benefits.

Product downgrades — One of the most common reasons for requesting a product change is the desire to avoid an annual fee without having to close your account. When you downgrade one of your existing accounts from a card with an annual fee to one without a fee, you may still be able to receive some key benefits while avoiding the yearly payment. For example, when I downgraded my Sapphire Preferred to the standard Sapphire with no annual fee, I continued to earn 2x points on all dining purchases even though this product doesn’t offer the 2x points on travel purchases.

Obtaining a product that’s no longer available to new applicants — Credit card issuers sometimes stop offering great cards to new applicants, but these products might still be available when you request a product change. For example, Chase Sapphire Preferred customers may be offered a standard (no-fee) Sapphire, and Barclaycard Arrival Plus World Elite Mastercard holders may be able to change to the standard (no-fee) Arrival World MasterCard, which is no longer offered to new applicants.

Extending your credit history — When you’ve had an account for a while, you might not want to cancel it, as it will reduce the average age of accounts in your credit history, which could have a minor impact on your credit score. Instead of closing your account to avoid paying an annual fee, consider a product change. This way, your account and its history remain unchanged on your credit report.

cards in wallet featured
If a card with an annual fee is merely taking up space in your wallet, it could be time to consider a product change to a no-fee option.

Maintaining your credit line — When you close a credit card account, you will reduce the total amount of available credit, which will raise your debt-to-credit ratio (for a given amount of outstanding balances). If you’re worried about impacting your credit, you can request a product change to a no-fee card instead of closing the account.

Avoiding new applications — Another reason to perform a product change is to use a new card without having to submit a new application. Each new application results in a check on your credit, and can also run afoul of some issuers’ policies such as Chase’s 5/24 rule. If there’s a credit card that meets your needs better than the one you currently have, a product change can allow you to use it without the impact of applying for a new card or opening a new account.

Discontinuing an unused card — If there is a drawback to the new Sapphire Reserve, it’s that it instantly makes your Sapphire Preferred obsolete.  There’s simply no reason to use your Sapphire Preferred to earn 2x Ultimate Rewards points on travel and dining when the Sapphire Reserve offers 3x in the same categories. So if you’re a new Sapphire Reserve cardholder and you also have a Sapphire Preferred, consider requesting a product change to another Chase card of your choosing, such as the Freedom or Freedom Unlimited. Then, you can transfer the points you earned from your Freedom or Freedom Unlimited account to your Sapphire Reserve account. Once the points are in your Sapphire Reserve account, you can redeem them for 1.5 cents apiece toward travel reservations or transfer them to airline miles or hotel points with 11 different transfer partners.

Disadvantages of product changes

For all its benefits, there are a few downsides to making product changes to your existing accounts. The biggest one is that you will not receive a sign-up bonus when you make a product change (with the possible exception of some targeted offers). As long as you’re aware of this going in, you can weigh it against the advantages in your particular situation.

In addition, most card issuers require that your account be open for at least one year before allowing you to make a product change, so don’t try to jump the gun.

Bottom Line

A very small percentage of cardholders know about this technique for maximizing your credit card portfolio, but it’s not very hard to do. By considering the best ways to strategically switch products on your existing accounts, you can always hold the best combination of cards for your needs.

Have you ever requested a credit card product change? Share your experience in the comments below!


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