Questions and Answers

When Lucky says he’s going to “swap” one card for another, I take it to mean that he is going to cancel/terminate his existing card and apply for a different card. What happens to points and annual fees if I cancel a card? Does that mean I have to use my points and cancel on card anniversary to preserve the benefits?

It depends on the cards in question. You’ve asked a couple of different questions here so let’s address them separately.

“Swapping” cards. Oftentimes you can “swap” (or upgrade/downgrade) cards in the same “family”. That means not only cards from the same issuer, but that earn the same kind of points/miles.

An example would be the Amex cards that earn Membership Rewards (MR). Assuming you meet any qualifications Amex has, you can often switch from the Gold Card up to the Platinum Card or down to the Green Card fairly easily. You could do something similar within the Ultimate Rewards (UR) “family” and Chase. I downgraded a Sapphire Preferred ($95 annual fee) to a Freedom Unlimited (no annual fee) card with no issues and even kept the same card number. Doing this sort of swapping – especially if you’re downgrading – doesn’t require a card application, something that shows up on your credit report.

If you want to stay within the same issuer but change to a different product (e.g. from a card that earns URs to Chase’s Southwest card) then it’s up to the issuer but my expectation would be that you’d have to apply for that card. And of course if you’re planning to drop a card from one issuer to get one from a different issuer you’d absolutely have to apply for the new card from the new issuer.

Your second question was about having to use points by a certain time in order to cancel the card. This depends on the kind of card you have. If yours is a co-branded card, meaning it’s affiliated with an airline or hotel chain, then you don’t have to worry about those miles/points – they’re safely in your frequent flyer/stayer account.

If your card earns a transferrable currency like URs, MRs, Citi’s ThankYou Point or the points/miles from cards like Capital One’s Venture card or the Barclays ArrivalPlus then yes, you must do something with those points before you close the card or you’ll lose them. URs, MRs, TYPs and C1’s “miles” can all be transferred to airlines and/or hotel programs. Barclays points – and this holds true for cash back cards as well – must be spent before you close the cards or you’ll lose them.

Keep in mind that if you have a premium card like Amex Platinum or Chase Sapphire Preferred and the reason you want to close the card is that it’s just too expensive – you can downgrade the card to something cheaper and hang on to the points. But for Amex, Chase and Citi you must have a card that earns these currencies and has an annual fee to be able to transfer the points to airlines/hotels. If, for example, you only have a Chase Freedom and/or Freedom Unlimited card then you can use your points as “currency” to shop through the Chase portal or as cash back on your billing statement but you cannot transfer them to an airline/hotel.

That’s a long-winded answer but hopefully it makes sense. Please let us know if we need to clarify further.