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How to Request a Downgrade for a Credit Card

Consider downgrading your credit card to avoid the consequences of canceling.

Man is sitting in front of his laptop computer at desk while holding his credit card in his left hand.
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A credit card with a high annual fee generally offers a higher tier of rewards that can make up for the cost. But if the annual price tag catches up with you and you aren't getting what you need from the card, don't immediately cancel -- it will likely hurt your credit. Instead, ask your issuer for a downgrade. 

When to downgrade your credit card

Contrary to what you may think, canceling a credit card can hurt your credit score because you're reducing the credit utilization and the average age of your accounts -- two factors that impact any credit score. However, this doesn't mean you're stuck with a credit card you don't necessarily want. Downgrading a credit card may make sense if you no longer wish to pay high annual fees or if the perks don't align with your spending habits. 

Benefits of downgrading a credit card

  • No impact on your credit utilization: When you downgrade a credit card, your credit utilization -- the ratio of your total credit to total debt -- remains the same as long as your credit limit doesn't change. 
  • The average age of your accounts remains the same: When you cancel a credit card, the average age of your accounts decreases, negatively affecting your credit score. But when you downgrade your credit card, you still hold on to the same account, which won't impact your credit score. 
  • No hard inquiry: Every time you apply for a new credit card, the lender performs a hard inquiry on your credit -- knocking your score by as much as 10 points. But when your lender issues a downgrade, you aren't hit with a hard inquiry. 

Drawbacks of downgrading a credit card

  • Limited to the same family of cards: When you request a downgrade, you have to stick with another credit card from the same issuer. In other words, you can't opt for an American Express credit card if you're currently looking to downgrade a Chase credit card. 
  • May lose unredeemed points or cash back: Check your rewards balance before moving forward with a downgrade because you don't want to lose any unused points, miles or cash back. If you aren't sure how your issuer approaches unused rewards, ask for clarification. 
  • No sign-up bonus: When you downgrade a credit card, you're generally ruled ineligible for the new credit card's sign-up bonus (if there is one). If the sign-up bonus is what you're after, you'd be better off applying for the new card altogether. 

How to request a credit card downgrade

Most issuers won't offer product changes outright, so you'll have to ask -- and the issuer isn't obligated to comply. But to maximize your chances of approval, consider taking the following steps:

1. Know your account stats

Before reaching out to your issuer, note how long you've had the account open. Issuers may be more willing to approve your request for a downgrade if you've been a cardholder for more than a year. 

2. Redeem any remaining rewards

You may lose unredeemed rewards when your issuer initiates a downgrade, so make sure you cash in on any remaining cash back or rewards before moving forward. 

3. Compare similar credit cards

Before you call the issuer, look for other cards from the same issuer that may fit your needs. There's a good chance the card issuer offers several different cards for different types of users so you may find a better fit.

4. Request a downgrade

Once you've settled on a card that's a better fit for you, contact your credit card issuer and formally ask if they can downgrade your card. They may suggest a different card you hadn't considered, so you may walk away with a different card than you'd planned.

Does downgrading a credit card affect your credit score? 

Downgrading your card is not likely to affect your credit score. However, it's a good idea to monitor your credit report regularly to keep tabs on where things stand and check for errors. 

The bottom line

If you're looking for a solution to high annual fees or a credit card that doesn't fit your financial needs anymore, options are available that won't hurt your credit score. Downgrading can be advantageous to bypass high fees, keep the credit line open and sustain the total line of credit. 

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