Credit cards can be an be an incredibly tricky game, but if you stay disciplined and organized it can be exceedingly rewarding. We already know this, though.
One strategy of that “game” is ensuring that you strategically sign-up, downgrade and even possibly cancel cards. One of the great things about many cards is the trial year banks give you to carry a card for a year, earn points, make use of the benefits, and not pay any annual fee. For a lot of these cards, like the Chase Sapphire Preferred, you will even receive the huge sign-up bonus before paying any fee. And depending on your credit card strategy, you can receive the sign-up bonus, earn on the card, then cancel or downgrade the card without losing points or paying an annual fee. This does require some careful planning, though.
Early last year, January 12 to be exact, I applied for the Gold Delta Skymiles Card from American Express. Looking back, I’m not sure that was my best move,but here we are regardless. I was offered an increased sign-up bonus of 60,000 miles for $1,000 in spend, and I wouldn’t pay an annual fee. At the time I was new to the game, and since I flew a lot with Delta for work I thought 60,000 would do wonders to bolster my stash. Whether it was the best decision or not, I knew that I’d cancel the card before my annual fee hit anyways.
For most cards similar to this (annual fee waived the first year), the fee will hit your account right after the 12 month anniversary mark. This is where it becomes crucial to know your credit card history. I’d recommend signing up for Credit Karma to easily reference information in regards to your credit history. No card issuer will allow you to downgrade the card before the year mark, but if you wait until after your 13th statement you may be stuck paying the fee.
For me I didn’t wait one extra day — as soon as the one year mark hit I made sure to call and downgrade the card. While most billing cycles are 30 days, I had time, but can never be too careful.
Unfortunately, with any co-branded card, you are restricted to downgrade (or upgrade) only to another card within that brand, in my case Delta. While I did know this going in, I played the ignorance card and hoped that maybe I could get the Blue AMEX Everyday card, or some Membership Rewards earning card. Unfortunately, it is a system restriction, and the credit lines aren’t interchangeable — I guess.
Nevertheless, I am now the proud cardholder of a Blue Delta SkyMiles Card from American Express. In all honesty, I don’t know if I will ever use this card. For now though, with my credit history being so young, and small, I don’t think it is a very good idea to cancel any cards. This downgrade has no affect on my credit score, and more importantly, does not add to my 5/24.
From a spending and earning point of view, this card is better than the Gold card I had before. It does not provide any of the benefits the Gold card does, but as a Platinum Medallion member none of those are any benefit to me anyway. The Blue card offers 2x miles on spend at restaurants, as well as purchases made with Delta. Unfortunately, I would never use this card over the Chase Sapphire Reserve — so it may have to sit on the bench (my dresser).
My mom has always said that blue is my color, though.
The decision to cancel or downgrade a card is a discussion for a whole other post. While I won’t be receiving any sign-up bonus, I do think it’s important to keep all the credit that I have while I am so new to the game.