It’s been a tumultuous year of sweeping changes to popular credit cards, so you might be thinking about which ones are still worthy of a spot in your wallet.
this Chase Sapphire Reserve® (See Rates and Fees) The big changes came in June, including raising the annual fee to $795. To offset it, new earnings rates have been added along with a range of travel and lifestyle points.
Now that the Sapphire Reserve has one of the highest annual fees for premium travel rewards credit cards, you might be questioning whether it’s worth continuing to hold on to. After all, paying $795 in one billing cycle is a big ask.
If you’re crunching the numbers and realize that a Sapphire Reserve may no longer fit your budget or lifestyle, it’s important to consider your options.
Should you cancel your account? Or should you ask for a product change? Let’s take a look at some possibilities and see which one works best for your situation.
TPG employees talk about changes
Several TPG employees, including credit card writer Danyal Ahmed, hold Chase Sapphire Reserve Thanks to its impressive earning rates and travel benefits.
He doesn’t view credit card changes and annual fee increases as negative developments. The new statement points strengthened his value proposition, and the new earn rate actually helped him earn Chase Ultimate Rewards points faster.
However, TPG newsletter and partnerships editor Emily Thompson has a different take on the recent changes and annual fee increase.
“I’m not sure I’m going to get enough value from the card’s updated benefits to justify the significant increase in annual fees,” she said. “My annual fee isn’t until May, though, so I’m going to see how much value I can get out of this card between now and May when I have to pay the annual fee. If I can’t justify paying that much, I’ll downgrade to a preferred card.”
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Related: Your Biggest Chase Sapphire Reserve Questions Answered: From Bonus Eligibility to Yields
Downgrade and cancellation
If you want to get rid of Sapphire Reserveyou have two options:
- Cancel it.
- Request a product change to a card with a lower annual fee.
In most cases, it’s better to downgrade your card than cancel it.
A credit score is made up of several factors, one of the main factors being your credit utilization ratio. Your credit utilization ratio may increase after you cancel your Sapphire Reserve because your overall credit limit across all your cards will decrease.
Also, remember Chase’s 5/24 rule. If you cancel your Sapphire Reserve and then apply for a new credit card, the new application will count against your 5/24 limit. However, when you downgrade your card, it is not considered a new account and does not count toward your 5/24 limit.
Once you cancel your card, you will lose any points remaining in your account. Some examples of using Chase points to get great value include:
There are also some restrictions to keep in mind when downgrading your card. Chase, for example, requires you to stay in the same card family. Therefore, you cannot change your Sapphire Reserve card to a Marriott co-branded card.
One of the biggest disadvantages of canceling or downgrading a credit card is that you’ll no longer have access to any of the card’s benefits, which in the case of the Sapphire Reserve includes $300 in annual travel credits, hotel statement credits, and lounge access.
RELATED: The Best Rewards Cards to Add to Your Wallet
Downgrade to Sapphire Preferred
A common option is to downgrade to Chase Sapphire Preferred® Card (See Rates and Fees).
It’s a great option for frequent travelers because it allows you to earn bonus points on travel, has access to Chase’s transfer partners, and has an easier-to-manage annual fee of $95.
Sapphire Priority card holders also get some great travel protection, including major rental car insurance.
Although the Sapphire Preferred Card may be new to you, you are not considered a new cardholder. Therefore, you are not eligible for the welcome bonus.
Cardholders can hold both Sapphire Reserve and Sapphire Priority at the same time, which is different from Chase’s previous rules.
Related: Chase Sapphire Preferred Card Review: Top Travel and Dining Cards
Downgrade to a no-annual-fee Chase card
If you don’t want to pay an annual fee, consider downgrading to a Chase card with no annual fee, such as Chasing Freedom® (see rates and charges) or Chase Freedom Flex® (See Rates and Fees).
What this means for you is that you won’t lose all your hard-earned points. They can still be used to purchase travel items on Chase Travel or redeem for cash back, both with an interest rate of 1 cent per point.
By downgrading to either card, you will not receive any kind of welcome bonus for the card you choose.
In the future, if you decide to apply Chase Sapphire Preferred or Ink Business Preferred® Credit Cardyou can transfer points back to the account that earned them True Ultimate Rewards points and then transfer them to Chase’s airline and hotel partners.
Information on preferred ink businesses is independently collected by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Related: Best Chase Credit Cards
bottom line
this Chase Sapphire Reserve The annual fee is high and may not be worth it for every cardholder. If you decide it’s no longer a good fit for you, consider downgrading to another Chase product rather than canceling your card outright.
cards like this Sapphire preferred and Chasing unlimited freedom A great choice as a trade-off for downgrading. By downgrading your card, you’ll protect your points and credit limit.
To learn more, read our full review of Chase Sapphire Reserve.
Related: Chase Sapphire Preferred vs. Sapphire Reserve: Which card is best for you as new changes take effect?
