The top travel credit cards can come with high annual fees, which is why it's a good idea to have an exit strategy for cards that don't justify their benefits after you've earned the signup bonus. Here are three of my favorite no annual fee cards to downgrade to.
Of course, another option is to simply cancel the card, although you don't want to cancel all your cards since one factor impacting your credit score is average age of accounts--so some no annual fee cards that you hold on to forever should be part of your portfolio. It's also worth pursuing a retention bonus before deciding whether to cancel or downgrade a high annual fee card.
1. Chase Freedom with 5X Categories: Downgrade from Chase Sapphire Preferred
I've had my Chase Freedom for years, and it gets so much use that I purposely have two of these cards now, having downgraded my Chase Sapphire Preferred card to it after applying for the Chase Sapphire Reserve. We always max out the grocery store and restaurant 5X categories, and this will add 22,500 Ultimate Rewards points per quarter when we do max out the categories, given our 3 Chase Freedom cards.
2. CitiBusiness ThankYou Card: Downgrade from CitiBusiness Credit Cards
The CitiBusiness ThankYou card isn't much talked about, perhaps because on its own, the ThankYou points aren't worth much and can't transfer out to ThankYou points airline partners. But if you have a Citi Prestige or Citi ThankYou Premier, you can combine the ThankYou points earned via the CitiBusiness ThankYou card and transfer out to partners. You also earn 3X ThankYou points on rotating categories:
- January-March: Office Supply Merchants, Advertising Services, Professional Services
- April-June: Computer Equipment Merchants, Software Merchants, Telecommunications Merchants
- July-September: Airlnes, Hotels, Car Rental Merchants
- October-December: Restaurants and Entertainment
Additionally, at the end of each CitiBusiness ThankYou card account membership year you earn an anniversary bonus calculated as a percentage of your base spend: 1% for membership year 0-1; 2% for membership year 1-2; and 3% after year 2.
3. AMEX EveryDay Card: Downgrade from AMEX Credit Cards
The AMEX EveryDay card is the no annual fee counterpart to the AMEX EveryDay Preferred. You earn 1 Membership Rewards point per dollar, plus a 20% extra points bonus if you make 20 or more separate transactions during a billing period. This isn't as attractive to me as the 5X rotating bonus categories of the Chase Freedom or the 3X rotating bonus categories of the CitiBusiness ThankYou card, but the AMEX EveryDay card can be handy if you want to downgrade from an annual fee AMEX credit card to one with no annual fee.
Just note that there are 25K signup bonus offers for this card, so you may want to earn that by applying for the card outright, rather than merely downgrading to it. The good news is that once you have this card, you don't have to worry about losing your hard-earned AMEX Membership Rewards points, since this no annual fee card does earn Membership Rewards points and will keep your other Membership Rewards points alive.
What are your favorite no annual fee travel credit cards?
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