Product-changing lets you replace your card without a credit pull

If you’re questioning the usefulness of a card, you don’t necessarily have to close it — you can switch to another card with the same issuer (often called product-changing).

Product changes can be a good move from a credit standpoint. But they’re not always allowed.

Basics and how-to’s

Product changes involve asking an issuer replace your card with another one in its portfolio without an additional application or credit pull. While the end result is a different card, the credit history and, usually, the credit limit remain intact.Credit card product change

Before asking for a product change, however, ask your issuer if it might make keeping your old card worthwhile.

“The first thing I’d do is ask if there’s a retention bonus, or if they can waive the annual fee in the first place,” says Grant Thomas, founder of the travel blog TravelWithGrant.” Most people are happy with the card, they just don’t want to pay the annual fee.”

If your issuer offers no retention bonus, pursue a product change by asking if you can switch to another card in its lineup. To avoid any confusion, emphasize that you are looking to make the switch without an additional credit pull.

How your issuer responds depends on the circumstances.

There are two common types of product changes, according to Thomas: downgrades and conversions. Downgrades involve switching from a card with an annual fee and premium benefits to a card with no annual fee (or a lower one) and similar (but fewer) benefits.

“For example, most airlines have a regular card with an annual fee of around $90 that gets you checked bags and priority boarding and 2 miles per dollar with them,” Thomas says. “And then they usually have a card with a lower annual fee and fewer perks, but you still earn 1 mile per dollar.”

In Thomas’s experience, downgrade requests are often granted.

Conversions, meanwhile, are a lateral move from one card to another that doesn’t necessarily share its features. For example, you might want to convert from a travel card to a cash-back card from the same issuer. And that’s harder.

“Look at it like families of credit cards,” Thomas says. “You can downgrade from a parent to a child, but maybe not go from one family to another.”

There are no hard and fast rules, however. For every long-shot request that’s denied, someone else might have success. Some issuers may even refuse simple downgrade requests. If you already have another card with the same issuer, though, there’s still a somewhat attractive alternative route.

“You can ask if they’ll move your credit line over to the other card,” Thomas says.

When to consider a product change

If your card’s benefits no longer justify the annual fee, it’s time to move on. It may not be that the benefits are lackluster, just that you can no longer make use of them, says Geoff Whitmore, travel blogger at NoobTraveler.

“For example, your job no longer requires you to fly United Airlines, so you wouldn’t need the perks the United credit card offers anymore, like free checked bags or priority boarding,” Whitmore says.

But if you’re just trying to avoid an annual fee, you can always cancel a card and apply for one you really want. So why try for a product change? Product changes can have some ancillary benefits you won’t get if you cancel the card and apply for another:

  • You can sidestep credit damage: First off, you’re avoiding a score-dinging credit inquiry, as no credit check should be necessary.

    Second, you preserve the card’s history, says Whitmore. If you cancel a card, its history will fall off your credit report at some point (after 10 years if it’s closed in good standing, seven years if the account has negative information). If you make a product change, the history of your old card lives on in the new, making this a strategic move if you’re product-changing your oldest card.

    Finally, you’ll be able to keep your credit limit, which is important for credit utilization, a major factor in your FICO score. If you close your card and apply for a new one, there’s no guarantee what your credit limit on the new card will be. It could very well be lower. If it is (and you have high balances on other cards), your credit utilization will be higher, and FICO’s formula will penalize you.

    “I have downgraded cards [instead of cancelling them] in order to keep my account history and credit history,” Whitmore says. “Downgrading to a no-annual-fee card lets you keep your credit history, and credit limit long term with no worries.”

  • More convenient for auto-pay: Have your card set up to pay your cable bill, electric bill, etc.?

    “The big advantage [of product changes] is the credit card number will usually stay the same,” Thomas says.

    That means not having to worry about late payments because you forgot to link a monthly bill to the new card. Your card number will change, however, if you change to a card from a different network (switching from Visa to MasterCard, for example).

  • You can preserve your rewards: Switching to a card in the same rewards family means a smooth transition for all the points you’ve already earned. For example, if you downgrade from the Chase Sapphire Preferred to the no-annual-fee Chase Freedom, your Chase Ultimate Rewards points will be safe, as both cards are part of the Ultimate Rewards family.

Product-change warnings

By foregoing the application process, you’re missing out on one of the biggest perks of opening a new card – getting a sign-up bonus. Some cards offer a couple hundred dollars or enough miles for a round-trip flight for new applicants.

“You usually don’t get that bonus,” Thomas says. “That could be a deal-breaker for some people.”

Another consideration: Make sure the benefits sacrificed in a downgrade are ones you’re willing to part with. For example, the Chase Sapphire Preferred lets you transfer points to partner airlines and hotels (a lucrative option), while the Freedom does not.

“If you downgrade before using those points, the points become worth a lot less,” Thomas says.

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