Weekend TWG Homework Assignment: What are the Best Credit Cards for Downgrades or Conversions?

Which Credit Card

Weekend TWG Homework Assignment: What are the Best Credit Cards for Downgrades or Conversions?

Good evening everyone, TGI (Thank Grant It’s) Thursday.  I will be flying up to San Francisco Friday night and coming home early Monday morning from Oakland.  I will not be blogging this weekend, but I will bring my phone so I can respond to emails and blog comments.  Since the collective knowledge of TWG readers is far superior than just my knowledge, I need your help.  I am working on compiling a page on best credit cards for downgrades or conversions.  For every annual fee credit card from a bank, there is a related no annual fee credit card.

Do you remember that kid in school who always asked the teacher if there was any homework due next week when the teacher clearly forgot to assign any?  Well, you can all thank Dan P for the suggestion (link):

I think a blog post about all the “good downgrading cards” would be great. Include the BoA Better Balance Rewards and the Citizens Bank Green$ense (pays you $0.25 per transaction, up to $20 per month; great for purchases under $5) in addition to other cards. Although other than those two I haven’t found any really useful, zero annual fee cards.

Steven got the ball rolling with this comment:

Best practice is to convert the Alaska card to a Better Balance card which will award $100 a year for minimal spending. I have 6 of them. :)

Followed by Jivepicnic’s comment:

I only have one Better Balance Card, so I have some work to do to catch up to Steven! I purchase an Amazon eGC for $0.50 each month, so I spend $6 per year to get $100. Actually for me it’s $120 because you get a $5 bonus per quarter if you have a BofA checking account as well.

Clearly, I have been living under a rock since I was unaware of this card until a few days ago.  I have closed several Bank of American credit card in the last 2 years to avoid the annual fee, when I could have earned $100 a year for keeping a credit card open (link).

BofA Better Balance Rewards

To help me out, please share any credit cards (personal or business) that have decent rewards for downgrading or converting a credit card.  Downgrading and converting credit cards are very similar and the only distinction I can think of is the family of credit cards.  For example, you can downgrade from a Chase Sapphire Preferred ($95 annual fee) to a regular Chase Sapphire (no annual fee).  In comparison, you can convert your Chase Sapphire (no annual fee) to a Chase Freedom (no annual fee).

One of the main drawbacks of downgrading or converting a credit card is that most of the time you bypass the sign up bonus in exchange for no hard credit inquiries.  When I downgraded my Chase Sapphire Preferred to a regular Chase Sapphire, I did not get the sign up bonus, but there was no hard credit inquiry and my credit card number stayed the same.  After using that card for a few months, I decided to convert the regular Chase Sapphire to a Chase Freedom.  I also bypassed the sign up bonus on that card, there was no hard credit inquiring, and my account number stayed the same.

The last example I have is that I converted a Citi American Airlines Platinum AMEX to a Citi Dividend MasterCard.  The conversion took almost 2 months for Citi to send me the new credit card and for them to close the old American Airlines credit card.  There was no hard credit inquiry, but I did bypass the sign up bonus.  Don’t feel too bad for me though, I earned $300 cash back with that credit card in January (link).

300 Citi Dividend Cash Back Statement

Here are my suggestions for now:

  • Chase Sapphire Preferred (or any Chase credit card that has an annual fee) >>
  • Chase Freedom (no annual fee) for the 5% rotating cash back categories, earn up to $300 per year in cash back
  • Citi American Airlines (or any Citi credit card that has an annual fee) >>
  • Citi Dividend MasterCard (no annual fee) for the 5% rotating cash back categories, earn up to $300 per year in cash back (no quarterly cap, only $300 annual cap)
  • Bank of American Alaska Airlines (or any other Bank of America credit card that has an annual fee) >>
  • Bank of America Better Balance Rewards (no annual fee) for the $25 cash back every quarter, up to $100 cash back every year
  • American Express >>
  • ?
  • US Bank >>
  • ?
  • Barclays >>
  • ?
  • Discover doesn’t have any credit cards with annual fees >>
  • Discover It (no annual fee) for the 5% rotating cash back categories, earn up to $300 per year in cash back

If you have any helpful information, please share in the comments below.  Have a great weekend everyone!

33 thoughts on “Weekend TWG Homework Assignment: What are the Best Credit Cards for Downgrades or Conversions?

    1. Grant

      Yes, I definitely agree. Thank you for telling me about this “free money” opportunity. Hopefully I will learn about other great credit cards.

      Reply
      1. Jivepicnic

        No, you don’t need to have a mortgage/loan with Sallie Mae to get this card. Points can be used as a pure statement credit (similar to the Barclays NFL card). I transfer mine to UPromise because I have a Sallie Mae Savings Account which earns me a 10% bonus on all UPromise points transferred into the account each year (bonus posts in February but they do get recorded as interest on 1099-INT for the account, so it’s effectively a 7% bonus).

        The Sallie Mae Rewards MC has no AF and earns 5% on the following purchases: grocery up to $250 per statement period, gas up to $250 per statement period, and bookstores up to $750 per statement period. I use this card for my actual grocery and gas purchases and save my Amex “old” BC and BCP for MS.

        Reply
  1. will

    I would downgrade to the cash + from us bank card. You pick the categories. Most interesting categories are book stores(amazon or amex college edition), charities (kiva), or restaurants for 5% on up to $2,000 spend per quarter

    Reply
    1. Grant

      That sounds like a pretty good deal. I will probably keep both US Bank Club Carlson credit cards open since I get annual bonus, but maybe my US a Bank FlexPerks credit card can be downgraded to a Cash + credit card. Thank you for sharing.

      Reply
  2. will

    I would downgrade amex to a blue cash preferred even with the $75 annual fee its worth it. I have heard amex will also backdate new account to your oldest line of credit with them so you’re better off applying for a new amex in order to get a bonus, then backdating the card, if you don’t mind the experian inquiry

    Reply
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  4. alex

    Amex – very complicated but this is some info I found at http://creditcardforum.com/blog/cancel-american-express-card-without-reading/

    Basically you can supposedly only downgrade within your current “class” of AMEX cards.

    “Charge Cards: These are the Green, Gold, Premier Rewards Gold, and Platinum Cards. You can do a product change within these tiers. For example, you can downgrade from Platinum to Premier Rewards Gold (which has an annual fee of $275 less). Or you can even go from the Platinum to the Green (which is $355 less). Unfortunately, there’s no AmEx charge card that has a $0 annual fee. So if you want to permanently avoid paying an annual fee, canceling will be your only option.

    Blue Cards: If you have the Blue Cash Preferred ($75 annual fee) you can downgrade to the Blue Cash Everyday ($0 annual fee).

    Delta Cards: I’m talking about the AmEx Delta Gold, Delta Platinum, and Delta Reserve. All of these have annual fees, but you can do product changes among them if you still want one of their cards.”

    The comments at the bottom of the page do note some exceptions. One person noted they were able to cross-downgrade (e.g. from Delta Gold to Blue Cash Everday)

    I think that in my personal opinion, if you have Membership Rewards points, the best to keep card with no AF to keep the MR points alive is the Amex Everyday (you can actually still redeem Membership Rewards Points for travel, etc even w this card). I actually have this (in conjunction w Biz rewards gold & Platinum — when I cancel those two I will still be able to keep MR points alive ….)

    Otherwise, a crowd favorite is the Blue Cash Everyday (but this can only can be used for cash back/gift cards / statement credits). It earns 3% cash back at U.S. supermarkets, up to $6,000 per year in purchases (then 1%); 2% cash back at U.S. gas stations; 2% cash back at select U.S. department stores; and 1% cash back on other purchases.

    Reply
    1. Grant

      I like my AMEX Platinum. The lounge access and other perks are well worth the $250 annual fee but I’ll try for a retention bonus. The AMEX Everyday card will probably get a spot in my wallet soon.

      Reply
      1. alex

        yah the only reason i got the everyday was b/c i was planning on canceling gold / platinum and wnated to keep my MR’s. there was also a targeted 25k points signup bonus for me at the time …. it just collects dust though b/c i have bcp and old amex blue too.

        Reply
        1. Grant

          I currently have the Blue Cash Preferred but want the Old AMEX Blue. Were you able to apply for the Old AMEX Blue while still having the Blue Cash Preferred open?

          Reply
          1. Grant

            Oh I see. Did she apply for the old AMEX Blue while still having the AMEX Blue Cash Preferred? Just curious since I am in a similar situation. Thanks Alex.

          2. Alex

            Grant she didn’t have BCP….I did and I already had so many amex cards I figured to just apply under her…. So sorry I dunno if there are any restrictions under having both (I would think not but I’m not sure…)

      1. raul

        Good news Grant I can confirm that you can have both cards. You might get a low credit limit though as was my case and that of most on flytalk. Still there are ways to hit the $6500 spend requirement within a month or two with low credit limit.

        Reply
    1. Grant

      Yes, I will be there. I have an exciting morning of garage sale-ing to do. Time to sell all my free reams of paper I got from various Staples Easy Rebates. I will get a post up this week reminding everyone about the OC Meetup. Will you be able to make it?

      Reply
        1. Grant

          Excellent, thanks for making the trip up this weekend. There are plenty of MS opportunities nearby include Walmart, Staples, Office Depot, several CVS stores etc.

          Reply
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