If you cancel it, all points on it will go "poof" 60 days later. Are you OK with that? If not, you can downgrade to the no-AF Preferred, that'll keep the points alive, and then once you have another card that can transfer, you'll be ablt to transfer them. BUT:
You haven't explained how long you've had the card. You can't get a bonus for a new Premier card if you've opened, closed, or product converted a Preferred, Permier, or Prestiga card in the previous 24 months. (And there are tales of woe of Citi also counting AT&T Access openings/closings in the previous 24 months, even though T&Cs don't say so!
)
So the Citi restrictions are not about having two of the same card, but precise timing of what you've done with previous cards in the same group. If you cancel or downgrade, you then start a new 24-month clock before you get another bonus on another Citi TYP card!
So you have to wait until you've had the card for 24+ months, then apply for the new card first, and only if you're approved and told you qualify for the bonus, only then cancel or downgrade the previous card. (
Only if you cancel/downgrade right after getting approved for the new card and new bonus, does your 24-month clock from last close end up almost the same as 24 months from last open.)