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Credit card cancellation strategy
Hey forum! New here. My question has to do with “credit cards: keep vs. cancel,” which Ben touches on in his “What’s in my wallet” posts. If there’s a more general post on the keep vs. cancel subject, could someone link me?
I got United and Southwest VISA cards through Chase a few years ago for the big mile bonuses and have enjoyed them. Reading the compiled reviews of other cards has made me wonder:
Should I consider canceling the UA and SW cards (and their annual fees) if I can get a Chase Sapphire, with another big sign-up point bonus, if the ultimate reward points are transferrable 1:1 to my United and/or SW accounts anyway?
The UA and SW cards give me 3x points on purchases from those respective airlines, but the Sapphire has 2x points on travel purchase (which I assume covers UA, SW, and many more) PLUS 2x points on dining, which is big for me.
I’m thinking of canceling the UA and SW cards and replacing them with Chase Sapphire and the Chase-issued British Airways VISA. I’ll get two big point bonuses, keep my Chase credit limits and annual fees the same, and have more flexibility and diversity of points (Avios, Ultimate Rewards, etc), plus one very versatile daily spend card (the Sapphire). Is my logic sound?
Why not downgrade your current cards to some no-fee card from Chase instead of canceling?
That way the average age of your credit cards stay high and it helps your credit rating.
I didn’t even know changing card programs was a thing. Shows what a noob I am. I might even want to lower the credit limits on them too to make room for more credit if I can keep the trade line, I’m guessing. Thanks!
[USER=1208]@Paul TATK[/USER] – is the SW companion pass something that could be valuable to you? If so that might be a reason to keep the card as spending on the card counts toward the miles needed to gain the companion pass.
If you care about the companion pass, considering to keep the SW card makes some sense. UA Card gives some benefits like priority boarding. If you are not a frequent UA flyer, then you might not get affected.
When switching product types or downgrading existing products, keep in mind the following:
If you are downgrading to a product that has a sign up bonus, you will be missing on that. For eg, you downgrade your Chase UA card to Chase Freedom, you will not get the 15K point Signup bonus on the freedom which you would have gotten had you applied separately.
Some banks, when downgrading perform another credit check at times. In my experience Chase is not one of those.
If you are planning to apply for multiple cards from different banks, consider applying the Chase Ultimate Rewards earning cards first.
All the best.