You may find that the credit card you've depended on for years is no longer suitable for your needs due to new credit card offers and changes in your spending patterns over time. If this is the case, you can apply for a new credit card and cancel your old one; however, doing so could require you to give up any rewards you have accrued to date and might have a negative impact on you your credit score.
Said, a "product change" allows you to go from one card in the same family to another in the same family, either higher or lower in terms of features, without having to cancel your present card and open a new one.
Calling the customer service number on the back of your credit card and inquiring about what alternatives are available is the first step in upgrading or downgrading your credit card. The following is a list of possible justifications for your decision to switch:
You No Longer Want To Pay A Charge Every Year
There isn't much use in paying an annual fee for a card if you don't use it very often and have cashed out any rewards you earned a long time ago. In this scenario, the most effective way to save money would be to downgrade to the card's no-fee variant. Even if the rewards program on the new card is less strong than the one on the old card, which is quite probable, the fact that the old card is already collecting dust in your sock drawer makes it almost irrelevant.
You Want More Relevant Bonuses
Your purchasing patterns and pattern of redeeming rewards will change over time. Changing the product that your card is associated with might enable previously inaccessible functionality. For instance, upgrading to higher-end version of your hotel card might bump you to more elite status tier with the loyalty program associated with that hotel chain. This can be handy if you begin to travel more often than you did in the past. If, on the other hand, you downgrade your card, it will mean that you will no longer be required to pay an annual fee for advantages that you do not make use of.
You Want To Get Rid Of The Card, But You Don't Want To Lose The Rewards You've Earned With It
When you close a credit card account, you may lose any rewards points that are still available in your account. You may be able to preserve your points even after a product change; however, you should be aware that the point values could be adjusted.
A Chase business card was one of the first financial products Steffa Mantilla, the creator of the personal finance site Money Tamer, obtained in the previous year. Even though there was an annual cost, there was a very big sign-up bonus, and travel point redemption rates were far higher than typical. When she realized she was no longer making use of the card's travel privileges, she switched to the card's no-fee equivalent to save money. If Mantilla's business travel schedule picks up again at some point in the future, she won't hesitate to request an upgrade to the card she had before.
You Want To Get Rid Of The Card, But You Don't Want To Lose Its History
Your credit scores are determined by several criteria, including the amount of time you've had credit and your payment history. As a result, it may be advantageous to have an open, active, and good-standing credit card account for several years. To reiterate, there is no need that you to pay an annual fee to get the advantages of an established credit card. If you downgrade to a card with no annual fee, you may keep the same account history and, in many cases, even the same account number, but the cost will be reduced.
You Should Keep Your Overall Credit Limit At The Same Level
Your credit usage, or the percentage of your total available credit that you are utilizing, is another component that goes into determining your credit score. You should charge at most thirty percent of your overall credit limit billing cycle since this is our recommendation. If you continue making the same purchases with your other credit cards after you cancel one of your credit cards, you will find it much simpler to utilize even more of your available credit. Your credit scores may suffer due to this, especially over time. Maintaining an open card account, whether by upgrading to a higher level or downgrading to a lower one, enables you to keep the same total credit limit.
