Source: The Points Guy
Summary
When a credit card’s annual fee is due, consider downgrading or product changing instead of canceling. Downgrading means switching to a card with a lower annual fee within the same rewards family, while product changing means swapping to a card that earns a different type of rewards currency. This preserves credit history and can provide a better option for those who no longer want to pay the annual fee.
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The escape is carefully planned.
Credit card holders can plan their escape from annual fees by downgrading or product changing their cards. For example, the United℠ Explorer Card can be downgraded to the United Gateway℠ Card, which has no annual fee. Similarly, the Air France-KLM World Elite Mastercard can be product changed to the Bank of America® Unlimited Cash Rewards credit card.
The decision to downgrade, product change, or cancel a credit card depends on various factors, including the length of time the card has been held, available options, and potential impact on credit history and future welcome bonuses.
Whatever the decision, it’s essential to check closed accounts for unexpected charges and consider the pros and cons of each option.
The Points Guy provides guidance on navigating these choices to help credit card holders make informed decisions.
And remember, preserving credit history is beneficial, especially if the card is one of the oldest.
Author: Evan Null
