Category

Freedom

Reader Question: To Close Or Not To Close (Chase Sapphire Preferred), That Is The Question!

Reader Question: Hey Parag! Love your blog, thanks for all the helpful tips! Just had a quick question, I got the Chase Sapphire Preferred Visa last year in March. The annual fee is coming due and I don’t really want to pay it. Should I close the card or should I keep it open? I’m really conflicted. Thanks!

This is a great question as I suspect a lot of people will be encountering similar situations in the coming months, as the annual fee for their Chase Sapphire Preferred comes due!

My Chase Sapphire Preferred isn’t up for renewal until June, however I will share what I plan on doing when the annual fee comes due.

1. Reconsideration Bonus

Anytime you want to close a card, doesn’t matter what type of card it is, always call your Bank a few months before the Annual Fee is due and act like you are thinking about closing the card. Although it depends on how long you have been with the Bank, how much money you spend on the card, and who the Credit Card issuer is, you can often get them to either waive the annual fee or provide you with some kind of retention bonus to not close the card. In my opinion I would try to get an annual fee waiver first because it is more valuable. If that doesn’t work, then try and get a retention bonus.

Remember that to acquire you as a customer, Chase spent 50,000 miles! Therefore it is much cheaper in the long run for them to waive your $95 annual fee and keep you as a customer, rather than spend another 50,000 miles to acquire an additional customer!

In my experiences getting reconsideration bonuses, American Express is really good about offering them, while Chase can be a stickler unless you spent a substantial amount on the credit card in the last year. When I had called last year to close my Continental OnePass card, I tried to get a reconsideration bonus but was denied. However when my girlfriend’s Father called to close his Continental OnePass Card, Chase offered him a $100 statement credit. This was likely because he had charged his younger daughter’s $30,000 college tuition on the card, therefore was considered a valuable customer! This is another case of Your Mileage May Vary, however it never hurts to ask!

If for some reason when you are “trying” to close the card and they don’t offer any type of reconsideration bonus, DON’T BE AFRAID TO ASK FOR ONE! I suspect that the “retention specialists” that you get transferred to get bonuses on how well they convert people into staying on the card. Therefore you might as well make their job easier for them and just ask for one. Worst thing they can say is no.

2. Downgrade

If you get denied for an annual fee waiver or a reconsideration bonus, my advice would then be to ask for a downgrade to the Chase Freedom.

The purpose of downgrading isn’t so much to get another card, it is more to help boost your credit score. By downgrading, you will avoid taking a hit on your credit score for closing an account and at the same time you will also extend the average length of your credit history. Even if you have no use for a downgraded card, I would still suggest you downgrade and then put the new downgraded card in your drawer to collect some dust.

While most downgraded cards are kind of worthless, in my opinion the Chase Freedom is one of the best “everyday” cards for the random months when you don’t have a mileage earning credit card. I would never suggest signing up for the Chase Freedom by itself because there are better cards out there with much larger sign up bonuses. However in this case because you already have a Chase Sapphire Preferred Credit Card open, downgrading will NOT result in a credit inquiry and you will get a semi-decent new card.

Benefits of Chase Freedom

  • No Annual Fee
  • Rotating 5% Cash Back Quarterly Categories Like Amazon.com, Gas Stations, Restaurants, etc.
  • Additional 10% Earning Bonus If You Have A Qualifying Checking Account

If you already have a Chase Freedom (as I do), you may want to consider downgrading to the regular Chase Sapphire Card (yes it does exist!). While there is no annual fee for this card, there is also no 2x points on travel, no annual dividend, and most importantly no cool weighted card! You still however do get 2x points on dining, instant access to customer service, and earn points via Ultimate Rewards.

The only thing to consider when downgrading is that you most likely won’t be eligible for any future sign up bonuses for that specific Credit Card. While this isn’t a huge deal for the Chase Freedom, as the current sign up bonus is only $100 (aka 10,000 miles), the Chase Sapphire currently has a 25,000 point offer. Therefore, I’d recommend downgrading to the Freedom first before considering the regular Chase Sapphire.

Hopefully that answers the question and helps those of you that are trying to decided what to do with your Chase Sapphire Preferred card!

If anyone has any other questions, I am always here to answer them! Just send me an email at FrequentFlyerUniversity@gmail.com or leave a comment below!

-Parag

 

 

 

 

What To Do With Your Continental Card & A New United MileagePlus Explorer 60k Miles Offer

In the spirit of spreading the miles wealth, last year I had told many of my friends and family to sign up for the Continental 50k credit card offer from Chase. It was one of the best deals of last year because it gave 50k miles instantly after your first purchase with no minimum spend requirements and the first year annual fee was waived. Also depending on how poorly Chase managed your account, you most likely received 2 free Continental club passes prior to your anniversary date. (I still received my 2 club passes even though I had closed the card!)

Well now that the United and Continental merger is almost complete and the annual fee is coming due, therefore a lot of people are asking me what to do with their Continental card?

I called Chase the other day to close my Mom’s Continental card and was given the hard sell for keeping the card. They were really insistent that my Mom keep the card open and it is easy to see how people not accustomed to the credit card churning game could easily be pressured to keep the card. Luckily, I was closing the card and not my Mom, so the representative’s persuasiveness got nowhere.

I am not 100% sure but I suspect that once the United / Continental merger is complete, Chase will switch over the Continental card to the new United MileagePlus Explorer card. Typically when these types of forced conversions happen, you don’t receive any miles for switching to the new card.

Therefore, if you currently have the Continental card, I suggest you do either close the card or downgrade it to the Chase Freedom card. In previous posts, I have talked about the many benefits of having the Chase Freedom card and the Chase Sapphire Preferred card. Since the Chase Freedom has no annual fee and some really useful 5% quarterly rotating categories, I personally think it is better to downgrade the Continental card rather than flat-out close it. Also by downgrading, it won’t cause an inquiry on your credit report. (Note: I receive no commissions or revenue from recommending the Chase Freedom card or any cards mentioned in this post.)

If you currently don’t have the Continental card or didn’t recently sign up for the Chase Sapphire Preferred card, I would suggest signing up for the new United MileagePlus Explorer card. It will net you 50k miles after your first purchase and an additional 10k if you spend $25k in a year (not to mention the additional 25k miles for the $25k spend). Also this is a great offer because there is no minimum spend requirement!

If you are interested in the United MileagePlus Explorer card, Daraius at MillionMilesSecrets and Brian at ThePointsGuy have it all covered and explain in detail how to sign up for it!

What did you do with your Continental credit card? Keep it, close it, or downgrade it?

-Parag