For years the Chase Sapphire Preferred has been the ‘best travel rewards card’ on the market. When the card was first introduced in 2011 it helped set the standard for travel rewards credit cards. Every credit card related website praised the card and how great the card’s benefits are. With all that hype it’s no surprise how popular the Chase Sapphire Preferred card has been. In fact, according to the most recent JP Morgan Chase 10Q, Chase has become the #1 credit card issuer in the United States.
Building off the Chase Sapphire Preferred’s success, Chase introduced the Sapphire Reserve in 2016. The Sapphire Reserve represents a significant improvement in card benefits over the Sapphire Preferred for a marginal increase in effective cost. With the redundancy created in my wallet with the addition to the Sapphire Reserve card I no longer see value in carrying the Chase Sapphire Preferred. To avoid paying the $95 annual fee I decided to give Chase a call and see what my options are.
My Plan To Downgrade or Convert The Chase Sapphire Preferred
It’s important to have a plan when trying to downgrade or convert a credit card to another bank offered product. I spent some time seeing what my options were prior to calling Chase. When I called I made sure to have my list of possible downgrade options prepared.
Option 1: Converting To A Chase Freedom Product
My first choice was to convert the Chase Sapphire Preferred to the Chase Freedom Unlimited card. The Freedom Unlimited card was the most appealing Chase product because it offers 1.5% cash back on all purchases. If my conversion was successful I’d have the perfect card to put non-bonus category spending on. Even better, Chase lets you transfer Freedom cash back ‘points’ to the Ultimate Rewards program at 1:1. That means with the Chase Sapphire Reserve and Freedom Unlimited cards I’d earn 3X points on travel and dining and 1.5X points on all other purchases. Lastly, the Freedom Unlimited card does not have an annual fee.
My second choice was to convert the Chase Sapphire Preferred to the Chase Freedom card. This card only earns 1% cash back on everyday purchases, but features rotating quarterly bonus categories. When you register for each bonus category you’ll earn 5% cash back on the first $1,500 of quarterly spend within the bonus category. Additionally, you can transfer cash back to the Ultimate Rewards program if you also carry an Ultimate Rewards card. The Chase Freedom card does not include an annual fee which again makes it a great conversion option.
Option 2: Closing My Chase Sapphire Preferred Account
If my conversion options failed I went into the downgrade call fully prepared to close my Chase Sapphire Preferred account. I hate closing credit cards, but there was no way I was going to pay the $95 annual fee. Typically you can request the bank to waive the annual fee instead of closing your account. Unfortunately the bank won’t waive an annual fee if you’re not putting any spend on the card. In my case I haven’t used my Chase Sapphire Preferred card since the Sapphire Reserve came out. Since I rarely use the card I fully prepared to close my account prior to calling Chase.
Calling Chase To Downgrade The Chase Sapphire Preferred Card
Calling Chase is always a pleasurable experience. After calling the number on the back of the card and instantly connecting to a live phone representative I explained why I was calling. I told the representative my intentions to downgrade the Chase Sapphire Preferred card to a Chase Freedom or Freedom Unlimited card. The phone rep informed me that I was ineligible to convert to a Freedom product because my Chase Sapphire Preferred account is less than a year old.
At this point I mentioned that I wanted to close my Sapphire Preferred account to avoid paying the annual fee. Right then the phone representative mentioned downgrading my Chase Sapphire Preferred card to the Chase Sapphire card. The phone rep explained the benefits of the no annual fee card and asked if I’d like to downgrade my account. After reading off the full list of Chase Sapphire benefits I decided to downgrade my Sapphire Preferred card to the no annual fee Sapphire card. By downgrading my card I keep my account open and avoid paying the $95 annual fee. Also, because I’m keeping my account open I should be eligible to convert to a Chase Freedom product in the future.
Final Thoughts
If you’re now longer getting value from a credit card there’s no reason to pay the annual fee. Most large card issuers offer no annual fee products which they’ll often let you convert or downgrade to. By downgrading your card to a no annual fee option you get to keep your account open. Keeping accounts open for long periods of time is a great way to improve your overall credit score.
With my Chase Sapphire Preferred card Chase allowed me to downgrade the card to the no annual fee Chase Sapphire card. I wasn’t able to convert to the a Chase Freedom card because my account is less than one year old. Unofficially the phone representative mentioned that I’ll be able to convert to a Freedom card after my account anniversary. For now, if you, like me have had the Chase Sapphire Preferred for less than one year and don’t want to pay an annual fee, make sure to call Chase and downgrade to the Sapphire card prior to your annual fee posting.
