When I opened the Chase Sapphire Reserve® earlier this year, I was eager to take advantage of the card’s 50,000-point welcome bonus (after meeting the $4,000 spending requirement within the first three months). But then Chase increased the Sapphire Reserve’s annual fee from $450 to $550, and I instantly wondered whether the card was still worthwhile.
I tossed around the idea of canceling the Sapphire Reserve card, but later opted to downgrade it since closing a credit account has the potential to lower your credit score. Downgrading a card doesn’t negatively impact your credit score since you keep the same credit line open.
Before I downgraded my card, I took a few actions to ensure that I used all of the card’s benefits. Here are the steps I took to downgrade my Sapphire Reserve:
Chase Sapphire Reserve®
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Rewards
10X points on Lyft rides through March 2022, 3X points on travel worldwide (immediately after earning your $300 annual travel credit), 3X points on dining at restaurants including eligible delivery services, takeout and dining out, 1X point per $1 on all other purchases
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Welcome bonus
50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening — worth up to $750 toward travel when you redeem through Chase Ultimate Rewards®
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Annual fee
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Intro APR
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Regular APR
16.99% to 23.99% variable
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Balance transfer fee
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Foreign transaction fee
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Credit needed
1. I confirmed why I wanted to switch cards
I reviewed all of the Sapphire Reserve’s benefits — from the annual $300 travel credit and Global Entry/TSA PreCheck credit to DoorDash statement credits and Lyft Pink membership — and concluded that I wasn’t using the majority of them, nor did I plan to in the future.
As a result, I wasn’t getting much value out of paying the $550 annual fee. I already pay a combined $345 for two other cards, so adding $550 to that was way more than I wanted to fork over annually for credit card fees.
Ultimately, the steep annual fee was the reason why I no longer wanted to keep my Sapphire Reserve card open.
2. I chose a new card
Once I decided that I wasn’t willing to pay a high annual fee for another card, I tried to figure out which Chase card fit my spending habits so I could downgrade.
Since the Sapphire Reserve is a travel card, I thought about switching to Chase’s other travel option, the Chase Sapphire Preferred® Card, which has a lower annual fee. But I ultimately didn’t choose the Sapphire Preferred since I already have the American Express® Gold Card, which offers better rewards rates on travel and dining.
The other options I had were the Chase Freedom Flex℠ and Chase Freedom Unlimited®. The cards are very similar but have slightly different rewards programs. Both offer 5% cash back on travel purchased through Chase Ultimate Rewards® and 3% on dining (including takeout) and drugstores.
However, the Flex card also offers rotating bonus categories that earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate (then 1%). Unlimited doesn’t have rotating bonus categories and instead offers a flat 1.5% cash back on all other purchases.
I chose the Chase Freedom Unlimited since I already have a rotating 5% card.
3. I redeemed all of my points
However, there are some situations where you may want to redeem the points you’ve earned before switching cards. For instance, the Sapphire Reserve credit card offers 50% more value on points redeemed for travel and Pay Yourself Back statement credits to cover purchases at grocery stores, on dining, at home improvement stores and for contributions to eligible charities.
The 50% enhanced value on points is only for the Sapphire Reserve card, not the Freedom Unlimited, so it was in my best interest to redeem my points while I could benefit from this perk.
I used up all my 50,000 Chase Ultimate Rewards® points to cover dining and grocery expenses until my points balance reached zero.
4. I called customer service to downgrade my Sapphire Reserve
When it was finally time to downgrade my Sapphire Reserve, I called the customer service number on the back of my card. I told the representative that I wanted to downgrade my card due to the Sapphire Reserve’s high $550 annual fee. They didn’t try to encourage me to keep the card and simply asked which card I wanted to switch to.
The rep confirmed I could switch to the Freedom Unlimited, then read several terms and disclaimers about the downgrade process, including:
- The new card has a $0 annual fee.
- My APR and credit limit remain the same.
- The foreign transaction fee is now 3% of each transaction in U.S. dollars (with the Sapphire Reserve there was no fee).
- The new rewards rates for the Freedom Unlimited.
Once they read me the information, I was told that I could expect my new card in 5 to 7 business days. All in all, the process was very simple and took less than 10 minutes.
Learn more about how to downgrade your credit card.
Chase Freedom Unlimited®
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Rewards
Earn 5% cash back on grocery store purchases (not including Target or Walmart purchases) on up to $12,000 spent in the first year, 5% cash back on travel purchased through Chase Ultimate Rewards®, 3% on dining (including takeout) and drugstores and 1.5% on all other purchases
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Welcome bonus
$200 cash back after you spend $500 on purchases in your first 3 months from account opening
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Annual fee
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Intro APR
0% for the first 15 months on purchases
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Regular APR
14.99% to 23.74% variable on purchases and balance transfers
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Balance transfer fee
Either $5 or 5% of the amount of each transfer, whichever is greater
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Foreign transaction fee
3% of each transaction in U.S. dollars
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.