A few weeks ago, we shared our process when deciding between the Chase Sapphire Preferred and Reserve card. In that video/post, I mentioned that you can always upgrade or downgrade between the Preferred and Reserve card. Though a few folks chimed in that there are other Chase Sapphire downgrade options that are more lucrative.
Downgrade to Freedom or Freedom Unlimited Card
Rather than just upgrading and downgrading between the Chase Sapphire Reserve and Preferred card, you can downgrade the card to either a Freedom or Freedom Unlimited card. This allows you to reapply for the other premium Sapphire card, which means that you’ll earn the opening bonus.
For example, if you had the Chase Sapphire Preferred card for a few years, but decided that you wanted the Sapphire Reserve, you could downgrade your Sapphire Preferred to a Freedom card and apply for the Reserve card. This assumes that you don’t already have the Freedom and Freedom Unlimited card.
This approach sounds great, right? Well, it’s complicated. We’ll review some factors that you should consider before moving forward.
Tips and considerations
1. “5/24” rule:
Chase has strict rules when it comes to the number of credit cards applications you’ve had in the past 24 months. If you’ve opened five or more credit cards from any issuer in the last two years, then your odds for an approval from Chase is extremely low until the time has passed. To determine your status, you can use services like Credit Karma to determine whether you fall under the 5/24 rule.
2. Re-earning a bonus:
If you’ve had any version of the Chase Sapphire card in the past, you can’t get a bonus if it’s been less than 24 months since you received your bonus. Keep in mind that it’s the bonus date and not the approval date that starts the timer. Also, it doesn’t matter if it was a different Sapphire card. To qualify for the sign-up bonus on a Sapphire card, you cannot have earned an opening bonus on any version of the Sapphire card within the past 24 months. For example, if you applied for the Chase Sapphire Preferred card in January 2017 and received your bonus on March 15, 2017, then you won’t be able to get a bonus on any Chase Sapphire card, even if it’s the Reserve card, until March 16, 2019. (UPDATE: Chase quietly changed the terms in August 2018 for earning a bonus from 24 months to 48 months. This makes it even harder to follow this strategy!)
3. “One Sapphire card” rule:
This means that you can’t have both the Sapphire Preferred and Reserve card at the same time. I also suggest being careful with your timing if you’re planning to cancel a card and reapply. Sometimes it can take a while for a card to close out and cancel on the issuer’s side. If you’re planning to re-apply for another Sapphire card, I suggest waiting a month or more to be safe. This ensures that the account is fully cleared out and closed on the issuer’s side before they consider your new application.
NOTE: Folks on some online forums have reported opening a Sapphire Preferred and Reserve account at the same time. It’s called “double-dipping”, and it requires you to follow a precise sequence of steps. While it seems to be working for some people, I do not recommend it. Chase is extremely strict about their rules, and I would be concerned that your account could get closed or your credit limit adjusted. This would likely result in a decrease in your credit score. Also, it may affect your ability to get future cards from Chase.
4. Your downgrade options are limited:
For the Chase Sapphire cards, there are basically three options — the Freedom, Freedom Unlimited, and the basic Sapphire card. The basic Sapphire card is not publicly available and is reserved solely as a product change option for current Sapphire Preferred and Reserve cardmembers. It’s a no-annual-fee version of the Chase Sapphire Preferred and Reserve card, but with significantly reduced benefits. Since it falls under the “one Sapphire card” rule, it’s not an attractive option for most people.
For the vast majority of cardholders, the Freedom or Freedom Unlimited card is the best option for a downgrade. Both have no annual fee and can earn Ultimate Rewards points that can be pooled with a premium Chase card.
Lastly, you can’t downgrade to one of the Chase co-branded cards (like the Hyatt or United). The Ink Business cards are also not valid options for a downgrade from a Sapphire card.
5. Ask for an annual fee waiver:
When you decide that you want to downgrade or cancel, it doesn’t hurt to ask whether Chase would consider waiving the annual fee. It used to be common for the issuers to waive annual fees or provide retention bonuses. Though they’re not as common nowadays, especially when it comes to certain issuers like Chase.
Of course, this only applies if you want to keep your current Sapphire card but have issues with the annual fee. If you’re trying to downgrade so you can apply for another Sapphire card, then a waiver on the annual fee won’t be helpful.
Downgrading your current Chase Sapphire Preferred or Reserve to a Freedom or Freedom Unlimited is a valid and lucrative option. It allows you to apply for another Chase Sapphire card and earn an additional opening bonus. However, there are many factors to consider. It’s not a good option if you applied for your current Sapphire Preferred or Reserve card less than
two four years ago (see Chase’s new 48 months requirement). Also, the approach is not an option if you already have a Freedom AND Freedom Unlimited card.
I did something similar in 2016 when I got first got my Sapphire Reserve card. Back then, you could have multiple Sapphire cards. At the time, I had both a Sapphire Reserve and Sapphire Preferred. Since I didn’t need both cards, I converted the Sapphire Preferred to a Freedom Unlimited Card instead of closing the account. It saved me from canceling the account and eliminated the annual fee. Though that was 2016, and things have changed significantly since then, especially with all the new approval rules from Chase.
Have you ever downgraded your Chase cards, or even reapplied for a Sapphire card in order to earn the opening bonus? Please share your experience below.