TPG reader question: What happens to my card’s travel protection benefits when I downgrade?

Mar 1, 2021

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Editor’s note: This article is part of our weekly column to answer your credit card questions. If you would like to ask us a question, tweet us at @thepointsguy, message us on Facebook or email us at tips@thepointsguy.com


Over the past year, cardholders have had to make some difficult decisions about what to keep in their wallets.

While we’ve seen some incredibly generous sign-up bonuses and limited-time perks, the reality is that some people may not need a high-annual-fee card anymore. Before you cancel a card, remember to consider your options, including whether a downgrade may make the most sense.

TPG reader Daniel K. asks us this week what happens to baggage and travel protections on a card that he plans to downgrade.

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I have a Chase Sapphire Reserve card, and I was planning to downgrade. I was wondering how my lost baggage and travel protection works when this happens. Will the coverage still be under the original card’s protection plan or fall under the new card’s coverage?

TPG reader Daniel K.

The premium Chase Sapphire Reserve is one of the best cards to use for travel, with perks such as 3x Ultimate Rewards points on travel purchases and an annual $300 travel credit. But beyond this, the $550-per-year Sapphire Reserve has one of the most comprehensive protection benefits of any card on the market. That includes trip cancellation and delay coverage and delayed and lost luggage reimbursement.

As a cardholder, you are bound to the benefits guide of your specific card product. With the Chase Sapphire Reserve — and for most cards — most of your protections and benefits will no longer apply after your account is closed.

That is, all of your protections and benefits will change to those offered by the new card, whichever one that may be.

Related: How to downgrade a Chase card

For instance, for the baggage delay benefit, the Chase Sapphire benefits guide states, “coverage will not be provided if the Cardholder’s Account is closed before the Baggage Delay occurs.” That means if you pay for a trip with your Sapphire Reserve and cancel the card before the trip, the benefit would likely not apply.

However, Chase goes on to note that “a Cardholder’s cancellation of his or her Account [does not] invalidate or reduce any otherwise valid claim that has already been submitted.” Therefore, if you already have an active claim but close your card, fear not, as your claim will still be valid.

Related: Which cards offer baggage delay protection?

Baggage claim at LGA Terminal B (Photo by Andrew Kunesh/The Points Guy)

For other benefits, such as travel protection and trip cancellation, there is less certainty on whether it would remain eligible after closing or downgrading your card account. It’s best to refer to your card’s individual benefits guide and call your card issuer for more details.

Related: Chase Sapphire Preferred vs. Chase Sapphire Reserve: Which card is right for you?

Bottom line

At the end of the day, the safest course of action is to assume that any protection and benefits will be null and void on your current card once you close your card account and switch or downgrade to a new card.

In Daniel’s case, downgrading to a Chase Sapphire Preferred may be a wise option considering the healthy array of travel and return protection benefits offered on this sister card with a much more palatable $95 annual fee.

The one disadvantage of downgrading a card is that you typically won’t get a sign-up bonus for the card you’re downgrading to. However, downgrading allows you to maintain your credit line and the average age of credit, so it doesn’t have the same negative effect on your credit score as canceling a card might. Finally, Daniel will retain full use of his transferable Ultimate Rewards points by holding onto an Ultimate Rewards-earning card that has an annual fee.

Featured photo by Zach Griff / The Points Guy

2020 TPG Award Winner: Premium Card of the Year
Chase Sapphire Reserve

SIGN-UP BONUS: 60,000 Points

TPG'S BONUS VALUATION*: $1,200

CARD HIGHLIGHTS: 3X points on all travel and dining, $300 annual travel credit, points transferrable to over a dozen travel partners and Reserve cardmembers will earn 3x points on grocery purchases until the end of April.

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

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More Things to Know
  • Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $900 toward travel when you redeem through Chase Ultimate Rewards®
  • $300 Annual Travel Credit as reimbursement for travel purchases charged to your card each account anniversary year. Through December 31, 2021, gas station & grocery store purchases will also count towards earning your Travel Credit
  • 3X points on travel immediately after earning your $300 travel credit. 3X points on dining at restaurants including eligible delivery services, takeout and dining out & 1 point per $1 spent on all other purchases
  • Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards®. For example, 60,000 points are worth $900 toward travel
  • With Pay Yourself Back℠, your points are worth 50% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Access to 1,300+ airport lounges worldwide after an easy, one-time enrollment in Priority Pass™ Select and up to $100 application fee credit for Global Entry or TSA Pre✓®
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more
Regular APR
16.99%-23.99% Variable
Annual Fee
$550
Balance Transfer Fee
Either $5 or 5% of the amount of each balance transfer, whichever is greater
Recommended Credit
Excellent

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.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.