The time to think about downgrading a premium credit card is when your annual fee is due and you don’t feel that the benefits you’re getting from the card are worth it anymore. The reasons for downgrading rather than closing the card vary, but one of the biggest considerations is you might not want to impact your debt to credit ratio, which is a critical component of your credit score. If you no longer have the credit line from that card in your credit report it will increase your credit utilization.
In a previous post we talked about how to downgrade credit cards issued by Chase, Citi and American Express. Here are some ideas to help you decide which downgrading path to choose for the cards issued by Bank of America, Barclaycard, Capital One and U.S. Bank.
Bank of America Downgrading Options
Bank of America doesn’t have no-fee versions of its co-branded airline credit cards, such as Alaska and Virgin Atlantic, but it has a couple of nice cashback cards and it’s quite liberal in terms of making product changes.
BankAmericard Cash Rewards offers two percent cashback at grocery stores and wholesale clubs like Costco, and three percent on gas for the first $2,500 of spend every quarter. You will also get 10-75 percent bonus cashback if you are a BofA banking customer.
Another BofA product called BankAmericard Travel Rewards Credit Card offers a flat 1.5 percent cashback on all purchases. It also has the 10-75 percent bonus identical to the BankAmericard Cash Rewards card.
Barclaycard’s Downgrading Options
Barclaycard Arrival+ is probably the most popular Barclaycard travel product, and there are three reasons why you might not want to cancel this card outright.
The first reason is simple and is not jeopardizing your credit score.
The second one is you might still have some miles in your account, and if you close the card you will lose them.
But there is also a third reason. Barclaycard has a Travel Community that allows you to earn miles by leaving travel reviews. Mind you, the rewards are small, and you won’t make millions, but the terms are easy enough, and if you like writing reviews on Trip Advisor, you might also like getting paid for it with Barclaycard. Every little bit helps, and if you close your Barclaycard Arrival+ card outright, you won’t be able to participate and make some very easy miles.
Solution: Downgrade to the Barclaycard Arrival card. It has no annual fee, you get to keep your miles and you can participate in the Travel Community and earn more miles. This is a very easy and straightforward downgrading option with no downsides.
Other Barclaycard products might not be as easy to downgrade, primarily the Aviator (formerly U.S. Airways) cards. There is a no-annual-fee Aviator card, but trying to get an agent to downgrade Aviator cards is an uphill battle.
Capital One Downgrading Options
The most popular Capital One card is Venture, due to those funny, brilliant commercials featuring Alex Baldwin. There is a no-annual-fee version of this card called VentureOne, but, for some reason, Capital One is incredibly reluctant to downgrade you. Some people have reported having to call multiple times, using chat, and even contacting the company by Facebook before they were allowed to make the change. So downgrading Capital One cards can be done, but just like the Aviator card, it’s not easy.
If Capital One agrees to let you downgrade. Here are your options:
VentureOne sounds like a logical choice for downgrading from Venture, but it’s a bit lackluster. While there is no annual fee, it only earns flat 1.25 percent cashback. Considering that there are cards that earn two percent cashback, it doesn’t seem there are any reasons to use this card on a regular basis. You will be able to maintain your credit line for credit score consideration though.
Quicksilver Rewards is a better option especially if you often use Uber. It offers flat 1.5 percent cashback and a promo for a free Uber ride (every tenth ride is free), which is good until March.
U.S. Bank Downgrading Options
With U.S. Bank, there is yet another reason to refrain from closing a card: if you have a U.S. Bank checking of savings account, carrying a credit card will help you avoid the fees, so you don’t have to guess and make sure your balance hasn’t gone below a certain threshold. The bad news is that U.S. Bank generally doesn’t allow product changes. For example, you can’t generally downgrade an airline credit card like Air Mexico to a no-fee Cash+ card.
The good news, however, is that the two most popular U.S. Bank travel premium cards have their own no-fee alternatives.
The family of the U.S. Bank Club Carlson Rewards cards include one business card and three personal, and out of these two personal cards, one doesn’t have an annual fee. U.S. Bank doesn’t make it easy for you to find this no-fee card (to the point that not all agents even know about it). If you take a look at the page, you’ll see a Club Carlson Rewards Visa Signature Card (in the middle) with a $50 annual fee, and a Club Carlson Premier Rewards Visa Signature Card (on the left) that carries a $75 annual fee, and so you might presume that these two personal cards and one business one represent their whole lineup.
However, if you click “Compare Cards” and scroll down the page, you’ll see a small print link to a no-fee U.S. Bank Club Carlson card.
So, the no-fee Club Carlson card does exist, and it’s actually quite good. You’ll even receive one free night annually at any Club Carlson property in the world as long as you spend $10,000 on the card a year.
Another popular premium product, the U.S. Bank FlexPerks Gold American Express Card which also has a no-fee counterpart, the U.S. Bank FlexPerks Select+ American Express Card. While it only earns one FlexPerks point per dollar, they are worth more when you redeem them on airlines. For example, 20,000 points can buy you a ticket for up to $400.
Whichever card you are trying to downgrade, always be proactive and research your options before making a call. You may find a card with good rewards and no annual fee. Depending on your relationship with the bank, you may even get a retention offer that will include waiving the annual fee or compensating you for it in another way like with bonus points or miles for example. Decide for yourself beforehand which card you want to be downgraded to and if there is an offer you can’t refuse.