Downgrading the $450 Sapphire Reserve to the $0 Freedom Unlimited

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Routinely evaluating, and occasionally even canceling, your rewards credit card accounts is a vital, though less glamorous, portion of the miles and points game. Recently, I helped my dad through this process with one-year-old Chase Sapphire Reserve Card. While this card likely has a permanent spot in my wallet, the $450 annual fee just didn’t make sense for him to pay again the second year. Before closing out that account we had several tasks to complete to make sure that he got as much value as possible from the card and its built-in perks such as the $300 annual travel credit and his accumulated six-figure balance of Ultimate Reward points.

The Hilton Honors American Express Business Card

Use up all the card perks before doing anything else

Before doing anything else to his account, we booked some travel through Chase using the points at a value of 1.5 cents each, transferred some to Hyatt in anticipation of some future travel, and moved some to United since that account balance was getting low. We did this because once we closed or downgraded his account, our window to get maximum value for the points would be over. We also were sure to use up his 2018 travel credit, largely booking shows for my mom and dad to see on a recent Vegas trip. These charges coded as travel, which was a nice surprise.

Act within 30 days of the annual fee posting

When all of that was finished, it was high time to do something with the card as the $450 annual fee had already posted, and that meant we had 30 days from the date the fee posted in order to close the card and get a full refund of the fee. I’ve read that you have a longer period of time in terms of the annual fee if you are downgrading the card, but we don’t want to push our luck, especially if the request to downgrade was denied for some reason.

My dad only gets one or two new credit cards a year, so he doesn’t have any Chase 5/24 or other concerns from getting lots of new accounts. Our initial plan was simply to close the Sapphire Reserve when we were finished dealing with the points and perks, but eventually, we decided to try and downgrade it to a no-annual fee-free Chase Freedom Unlimited Card. He could have easily applied for that card outright and then gotten the sign-up bonus, but downgrading would keep his account number and account history without him having to open a new account. It is a good idea to be sure you are a good customer instead of one who just takes the rewards and run, so he decided to stick around with this account, just without the big annual fee.

Requesting a Chase product downgrade

After we had finished all of our tasks related to using the Chase Sapphire Reserve benefits, we sent Chase a secure message from his account requesting that the card be downgraded to a Freedom Unlimited Card. This card is in the Ultimate Rewards family, but it has no annual fee and it earns 1.5x points per dollar everywhere, which is very strong for a card with no annual fee. The points earned by the Freedom Unlimited are not transferable to the Ultimate Rewards travel partners by themselves, but since my mom still has a Sapphire Preferred, my dad could transfer his points to her, and then she could send them on to a hotel or airline partner. When he gets a Sapphire Preferred at some point in the future, he could then transfer those points earned by the Freedom to hotel and airline partners such as United, Hyatt, and Southwest himself.

Saving up Hyatt points for Hawaii and beyond

Chase wrote back within a day or so, but instead of granting his downgrade request as they have done for me in the past, they said he had to call to talk about those sort of options. I’ve seen an increasing number of reports recently where Chase has not done product changes via their secure message portal, but instead has required a phone call. Once he made the call, the request to downgrade the Sapphire Reserve to a no annual fee Freedom Unlimited was granted.

His new card, tied to the same old account, arrived within a week and the $450 annual fee from the Sapphire Reserve was indeed reversed from his account. In the end, he used up all of his Sapphire Reserve perks worth well over $2,000 in the 12 months he had the card, kept his account number and history, avoided the second $450 annual fee, and now has a very solid Chase card with no annual fee that earns 1.5x points per dollar. I imagine the Freedom Unlimited card will be a longterm resident of his wallet, and now he is ready to move on to finding the next reward credit card that will be the right fit for him and his upcoming adventures!

What did you decide to do with your Sapphire Reserve in its second year? Did you keep it, cancel it, or downgrade it?

 

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Comments

  1. I can’t see ever dumping the CSR unless they start chipping away at the benefits. It’s only $150/yr (after the travel credit) and has so many perks: 3X dining, 1.5 c/p valuation for travel purchases, Priority Pass, point transfer capability, primary rental car coverage – There are too many perks to let it go at this time.

    • I agree with Mike L I use this as my everyday card even though I have a AMEX PLT since 2002. Finally used the travel service with the card a week ago and got a better deal in Venice than AMEX!

  2. My wife did the same thing once her 2nd annual fee hit. She got the initial 100K UR points, got 3 $250 credits, used the Global Entry reimbursement and only had to pay the initial $450 annual fee. We were able to PC from the CSR to Freedom Unltd by secure message about a month ago.

    The reasons for cancelling: I just got the Sapphire Preferred so we don’t need the CSR for UR transfers. And, most importantly, I have the Citi Prestige apparently locked into a $350 AF due to a past Citigold account (Citi gonna Citi). So we get Priority Pass and other good stuff on that card for $100/yr without the need for another high annual fee card. Plus we use the fourth night free credit several times a year, a great benefit.

    • Perfect. I agree that while almost any of these cards can be justified for a frequent traveler, a person doesn’t necessarily need two, or three, or four premium rewards cards that all carry $400+ annual fees. I mean, some do, but not all need that. Sounds like y’all did well.

  3. mommypoints “It is a great card for frequent travelers for sure!”

    are you not a frequent traveler? I love the trip protection. Use it once and it could pay for itself for years especially factoring the travel credit.

    • Dan, I still have mine. It was my dad’s card that we downgraded. Trip protection is great indeed and I’m not advocating against the CSR as I love it, but it is not the only card out there with solid trip protection. I don’t forsee canceling mine in any near term, but my dad didn’t need a card with this high of a fee.

  4. My husband is keeping his reserve card. We cruise a lot and love the trip insurance on the card that saves us a bundle on every cruise. We do still need to insure for medical needs as we are over 80 and cost goes up rapidly at that age. I have Freedom as a keeper and will let my Chase Saphire expire when the next renewal fee comes due. We are mileage junkies, have been flying essentially free for over 15 years and now really enjoy the lounge perks at the airports.

    By the way, enjoyed your ski articles. For us now skiing is just a lovely memory but nice to read about.

  5. I plan on downgrading mine to the chase sapphire preferred card. I already used the $300 travel credit for this year and have 10 priority passes with hilton cards, as does hubby. I read for a downgrade you have 60 days to get the full fee credited. Then hubby can be an authorized user on my card without a $75 fee, so he can transfer UR points also. Tried messaging chase, but they said I needed to call. Read that’s the case now.

        • My husband down graded just recently to freedom at about day 55 and got the full refund. Ended up getting 3 $300 travel credits off of just one annual fee (signed up in December 2016), that card really paid dividends.

  6. We e need to downgrade my husband from CSR this week. I have CSP. So if we downgrade him to a freedom, he can transfer his UR to me, even if he doesn’t have another chase Sapphire card?

  7. We downgraded my husband’s and I am keeping mine- the perks are great! Quick question: we *are* considering canceling my SPG AMEX… when i call to cancel should I request they transfer my available credit to one of my other Amex cards? Thanks as always for the great blog!

    • Personally, I like to do that as a two step process. I like to ask to move credit around first due to upcoming purchase plans or whatever and then close out a card later so to not confuse the two issues. Sometimes though I also just like to let the credit go to improve chances of instant approval in the future if I am at the max for that bank.

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