Here's What Happens When You Ask Chase to Downgrade Your Credit Card

If you're tired of paying an annual fee on your pricey Chase credit card, you have two options: cancel or downgrade. Cancelling can have some negative consequences for your credit, so downgrading could be the better option.

The actual process involves a quick phone call to Chase, and the impacts will be immediate. The details can vary depending on which card you're changing, however. Let's take a deeper look.

The phone call should be pretty painless

For those concerned, the phone call itself should be simple and straightforward. You'll call the number on the back of your card, then navigate the menus to get to a service rep.

Once you have a human on the phone, just tell them which card you'd like to downgrade and which card you want instead. As long as the products are eligible, the rep can take care of it right away.

The rep may ask a few questions about why you want to downgrade -- not wanting to pay the annual fee is a perfectly reasonable answer here -- but shouldn't try to push any extra products on you. Barring unforeseen complications, everything should be handled in less than 20 minutes. (It took about 15 the last time I did it.)

You'll lose benefits right away

Don't call Chase for a downgrade until you're certain you're done with your existing card. As soon as the rep makes the change, your old card -- and its benefits -- will be gone. There is no grace period after a product change to use up remaining perks.

For example, suppose you downgrade a Chase Sapphire Reserve® to a Chase Freedom Unlimited®. All of your Chase Sapphire Reserve® benefits become inaccessible as soon as the change is made. You'll lose airport lounge access, any remaining travel credit, extra travel insurance, and so on. You'll also lose the ability to redeem your points for travel (more on that below).

Use up any credits you have before you call to downgrade.

Your points endure, redemption options change

The good news is that your rewards don't disappear when you downgrade your Chase card. The bad news is that you probably won't get the same value out of them.

Cards from both the Sapphire and Freedom families earn Ultimate Rewards points. So, you'll keep all of your Ultimate Rewards points even if you transfer between the two families.

However, only Sapphire cardholders can use Ultimate Rewards points for travel. If you only have a Freedom card, your redemption options are generally limited to cash back and gift cards.

You'll also see a change in how you redeem even if you stay in the Sapphire family. The Chase Sapphire Reserve® gets a base value of $0.015 per point when redeemed for travel through Chase. The Chase Sapphire Preferred® Card only gets $0.0125 per point. And yes, that change kicks in immediately after the downgrade.

If you're going to use your points for travel and/or transfer them, do it before you downgrade.

Choosing your downgrade product

It's important to know what card you want to downgrade to before you call. There are a few limitations here that you should keep in mind:

• Sapphire cards can be downgraded to a lower-tier Sapphire card, or to Freedom cards.
• You can't product change between Chase-only credit cards and cobranded cards.
• You can't product change between personal and business credit cards.
• You aren't eligible for any kind of welcome bonus for the new card when you downgrade.

So, for example, say you want to downgrade your Chase Sapphire Reserve® card because of the $550 annual fee. If you still want a travel rewards card, you could decide to downgrade to the Chase Sapphire Preferred® Card. It has a much lower $95 annual fee, and you can still transfer your Ultimate Rewards points to travel partners.

If you don't want to pay any annual fee at all, however, you could turn your Chase Sapphire Reserve® into a Chase Freedom Flex℠. You'll lose the ability to use your points for travel, but you also get to enjoy having no annual fee.

What you can't do is turn your Chase Sapphire Reserve® into, say, an Ink Business Preferred® Credit Card. You also can't turn it into an airline credit card, hotel credit card, a cobranded store credit card, or any other card not solely offered by Chase.

Down but not out

There are a lot of good reasons to hang on to an old card -- but few of them are worth paying a pricey annual fee. Downgrading can be a great solution to kick the fee and not lose the card.

Downgrading a Chase credit card is a simple process so long as you know the rules. If push comes to shove and you regret the downgrade, you can always just upgrade again. Or, better yet, apply for a new card for another welcome bonus.