When It Makes Sense To “Downshift” A Credit Card

Last year, I applied for the Amex Business Rewards Gold card to earn a bonus of 75,000 Membership Rewards points. The annual fee of $175 was waived for the first year, but this month the fee loomed large in the background, because I definitely did not want to pay it when it came due!

Before I did anything official with Amex, I spent some time on Flyertalk and MilepointΒ to educate myself on current retention bonuses people in the Points and Miles community had received for this card. I learned that the “going rate” for retention was around 15,000 Membership Rewards points: a decent bonus, but not enticing enough for me to justify keeping the card. While I knew that I could probably squeeze a couple hundred dollars out of 15,000 points, I don’t have an immediate redemption need, and frankly I’d rather have the $175 in my pocket right now than 15,000 additional points in my account for later.

Tip: before you communicate with the credit card company, do some research to determine if other members of the community have recently reported getting retention bonuses, then decide on a bonus amount that would work for you.

 

Armed with this information, I called the number on the back of my card. I explained that I was thinking of canceling the card because of the high annual fee. I was quickly transferred to the “Membership Consulting” department (direct line: 1-800-875-5592). The rep I spoke to was efficient and friendly. He immediately offered to switch my account over to a no-fee card, the Blue for Business. He explained that I would receive a bonus of 10,000 Membership Rewards points as part of the deal, plus the card came with a 30% points bonus each year. Was I interested?

For me, this was a total no-brainer. I made the switch, got the points, and saved $175. Another reason I made the swap was I’ll be able to apply for the Business Rewards Gold again in 12 months and get the current bonus on that card for a second time (according to Amex’s current t+c).

Bottom line: it’s always a good idea to carefully consider the cards you have in your wallet (or your sock drawer). Spending a few minutes to research your options with each card can save you hundreds of dollars, earn you thousands of points, and continue to provide a way for you and your family to travel for free. In other words, what are you waiting for? Do it now! πŸ™‚

 

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Comments

  1. Does downgrading include a credit pull (hard credit check)? πŸ™‚

    • Points Pixie says:

      Lucky – Great question. Make sure to ask when you talk to the customer service rep. In this case, downgrading did result in a hard pull, but it was worth it to me.

  2. Dang, I never thought of bargaining with them. I’ve been canceling cards left and right to avoid the new fees.

  3. Points Pixie says:

    Anne – Yes, often they will waive the fee or offer you an incentive (retention bonus) to keep the card. Josh just called to discuss his Citi AA Amex card and not only did they waive the fee, they offered him an $85 statement credit and 750 bonus miles per billing cycle after $750 spend per billing cycle, for 12 months. He took the deal πŸ˜‰

  4. Huh. I have previously attempted to downgrade a Gold card to a Blue and been unsuccessful. Reps told me I couldn’t go any lower than a Green. Same thing with my wife’s personal card. Have to try again with my Platinum Business in the future and see if things are any different there.

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