Maybe you’ve had a card for a while and you don’t ever use it, or you used to use this credit card but now you don’t feel the annual fee is worth it. Maybe you signed up for a credit card just for the signup bonus and never had the intention of keeping it beyond that first year. You may be asking yourself, what do I do now? Should I cancel my credit card? Should I keep it? Can I downgrade it to another card? What even is downgrading?! Well, you are in luck because I am going to answer all those questions for you!
Downgrading is when you change your credit card to a different card that doesn’t come with an annual fee. When I decide I don’t want to keep a certain card the first thing I look into is if there is an option to downgrade to another card so I can keep the account open. For example, we didn’t want to pay the annual fee on my husband’s Chase Ink Business Preferred Card again so we called into the bank and downgraded it to the no-fee Chase Ink Business Cash. It won’t look super stellar on your credit account if you open up 10 cards and close 9 of them in the same year. I try to not cancel more than half of the cards I open. But, I don’t want to pay an annual fee on a bunch of cards either. Here are some reasons you might downgrade:
Before you cancel, it may be worth calling the bank and speaking with someone from the retention department and seeing if they have any retention offers. This can be anything from waiving the annual fee to offering you points if you spend a certain amount on the card. Here are some reasons you might cancel a card:
What it all comes down to is saving yourself some money and making travel a little easier. If your annual fee cards are doing either of those things for you then hang on to them. If you don’t feel like your annual fee cards are serving you well, then look into downgrading or canceling. Doctor of Credit has a helpful post about downgrading and shows you some of the cards you can downgrade to. Another easy way to find out if there is a card you can downgrade to is to call the bank and ask. And as always, contact me if you have any questions 🙂 And remember, don’t cancel those cards you have had for years and years!
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