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Why I Downgraded My Chase Sapphire Preferred to a No-Fee Card

Why I Downgraded My Chase Sapphire Preferred

Whenever an annual fee hits one of my many credit cards, a little shiver runs up my spine. It’s like a visit from an extended family member who lives in another state—you know it’s coming, but you still dread it.

I’ve held my beloved Chase Sapphire Preferred credit card for four years, and when the time came to pay yet another annual fee, I picked up the phone and downgraded the card to the Chase Freedom Unlimited. However, I didn’t product change the card just to avoid the fee. There were a few reasons behind my canny action.

New Welcome Bonus

It’s unintentional, but I happen to be under Chase 5/24—you know, that rule that doesn’t allow you to open a new card with Chase if you’ve opened five or more new credit card accounts in the last two years—and I was looking for ways to increase my Ultimate Rewards points balance.

However, Chase makes it difficult to earn multiple welcome bonuses on its popular rewards cards. In addition to the 5/24 rule, the bank limits earning a sign-up bonus on any of its Sapphire-branded cards to once per 48 months. This means that the stars have to align just right for a consumer to be eligible for another bonus on the same credit card.

Thanks to my lucky stars, my situation was exactly the one Chase intended to prevent with its draconian rules. After product changing my Chase Sapphire Preferred card to the Freedom Unlimited, I waited a month and re-applied. Fortunately, my application was approved, and I’m on my way to earning 60,000 Ultimate Rewards points. Fingers crossed.

I Wanted to Protect My Credit Line and Credit History

I could’ve just canceled my credit card outright, but instead, I chose to downgrade the account to a no-fee card. Doing this preserves my credit limit and lengthens the age of this particular account.

Both of these factors contribute positively to my credit score. The high credit line allows me to keep my debt-to-credit ratio low, and the average age of accounts looks mature with a few older accounts on it. It shows that I’m a responsible borrower, which affects my score in a good way.

By downgrading the Sapphire Preferred card to the Chase Freedom Unlimited, I kept the four-year account and the $8,000 credit limit intact.

I Can Earn 1.5X Ultimate Rewards on All Non-Bonused Spending

When the Chase Freedom Unlimited card hit the market, I wasn’t that interested in it for a couple of reasons. I had been happy with the Chase Freedom card and its 5X earnings on rotating categories, and I didn’t want to go overboard by applying for too many Chase cards. Years later, I decided that I absolutely needed that card in my wallet to maximize my earning potential.

Although it’s technically a cashback card, the Chase Freedom Unlimited earns Ultimate Rewards points when paired with a premium Sapphire card, such as the Chase Sapphire Preferred or the Chase Sapphire Reserve. The points can be transferred to hotel and airline loyalty programs for maximum value.

This means that all my non-bonused spending—literally everything I buy that earns just 1X point per dollar spend—will reward me with 1.5X Ultimate Rewards points from now on. These purchases include car repairs, health insurance, random Target runs, you name it. Once I’m done meeting the minimum spending requirements on the Chase Sapphire Preferred, I’m going to shift all those purchases to the Chase Freedom Unlimited.

In Conclusion

It goes without saying that earning credit card rewards requires a certain level of strategy. Some people might say that staying under 5/24 deliberately isn’t the best approach because you forego too many other sign-up offers, but doing so accidentally can help you snag another welcome bonus from Chase.

Dr.Ells January 26, 2020

PLEASE, FlyerTalk, STOP purchasing “stories” from this insipid writer, who is a colossal village idiot, with NEVER a piece of information to share, but rather, a host of advertising with which she hopes to line her economy minus pockets.

hfb606 January 25, 2020

Hi! I just figured out a way of snagging a second signup bonus from Chase for the Sapphire Preferred card and got around their 'Draconian Rules'. Here's how I did it...

LuxTvlr January 25, 2020

I agree, i don't see a need to use a 5/24 slot for the Freedom cards. Just downgrade to them.