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How to Downgrade Amex Credit Card to Save Annual Fees

Today we’re looking at ways to save on annual fees, including downgrading your American Express credit card and utilizing a retention bonus

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Downgrading your Amex credit card to save on annual fees is a practical way to optimize your budget during this period of economic turbulence. Uncertainty has been off the charts in these past few weeks due to the coronavirus outbreak and the restrictions created by local health guidelines that followed. Today we’re looking at ways to save on annual fees, including downgrading your Amex credit card and utilizing a retention bonus. 

 

Why You Shouldn’t Close Your Amex Credit Card Account

Closing down your credit card account might sound like the first logical option to save an annual fee, but it’s one of the things Credit Shifu has always advised against. Firstly, your credit utilization will see a sizable increase immediately after the closure of the account. Credit utilization is one of the main factors that determine your credit score and accounts for 30% of it. Length of credit history accounts for 15% of one’s credit score. If you close your credit card account it affects the average length of your credit history, your number of credit lines and credit utilization and can thus negatively impact your credit score. 

The best option in this scenario is to downgrade your credit card to one with lower or no annual fee. This way you won’t increase your credit utilization, won’t hurt your credit score, and retain your same account number and account history. But there are a couple of other options we will explore first.

 

Waving an Amex Credit Card Annual Fee

If you’re a US military service member or the service member’s spouse, your AMEX Platinum card annual fee ($550) or annual fees from other cards can be waived under AMEX’s interpretation of the Service members Civil Relief Act (SCRA) law. You do need to request the fee to be waived though, and you can request one line at this Amex landing page for service members.

 

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Offsetting Amex Credit Card Annual Fees 

If you’re not a US military service member or the service member’s spouse, there isn’t really a way for you to waive your Amex card annual fees, but American Express retention specialists might offer you a retention bonus to help offset the cost of the annual fee. The retention bonus might be offered in the form of statement credit or extra points,  like say, 21,000 Marriott points for $500 spending in one month, as was the case when Credit Shifu got a retention offer on the old Amex SPG card (Now Amex Marriott Bonvoy card). 

 

Downgrade Your American Express Card

If a retention bonus wasn’t available to you or you weren’t quite sure its value was enough to justify paying the annual fee, your next option is to downgrade your Amex card to an Amex no annual fee card or Amex card with lower annual fee. Because this is considered a product change it doesn’t affect a credit line on your credit report and your credit card will continue to age, increasing the average age of your accounts. However there are some rules;

• You cannot product change between charge cards and credit cards.

• You can only switch between cards that earn the same type of rewards (e.g cash back, MR points, points for certain airlines or hotels).

• You cannot change between co branded series of cards e.g. from Delta Airlines to Marriott card (similar to the rule above)

• You cannot product change between business and personal cards

Downgrade Your Amex Charge Card

With an Amex Charge Card (although Amex doesn’t call them charge cards anymore), you have no pre-set spending limit, but you are required to pay your Charge Card balance in full every month. You can’t downgrade an Amex charge card to a credit card. But you can downgrade to a charge card with a lower annual fee. American Express currently publicly offers three charge cards to customers: American Express® Green Card, American Express® Gold Card, and The Platinum Card® from American Express. Each card comes with an annual fee, the lowest of which is $150 (American Express Green Card).

It is worth noting that the co-branded Amex Platinum cards, the most common of which is the Charles Schwab Amex Platinum, cannot be downgraded at all. There is another trick to note here with downgrading charge cards, American Express has their “once in a lifetime” rule for welcome bonuses. This means you can only get a bonus once per card. But the Charles Schwab Platinum counts as a separate card from the regular Platinum, so you could, in theory, downgrade to green from Platinum and then re-apply at a later date for the Charles Schwab Platinum and get another welcome bonus.

Here are the groupings for Charge Card product changes:

Green ($150 AF) <> Gold ($250 AF) <> Platinum ($550 AF)

Business Green <> Business Gold <> Business Platinum

Charles Schwab Platinum (no product change option)

 

Best Downgrade Options for Amex Credit Cards

Like we mentioned, cards can only be downgraded within their series, many Amex credit cards are co-branded with airlines or hotel chains, thus you can only downgrade within those series of cards.  In addition there are four personal “Everyday” cards plus the Cash Magnet card that can be downgraded within their series, but remember the other rule, cards you product change to must earn the same type of rewards, two of these Everyday cards earn MR points and two (plus the Cash Magnet, so three) earn cash back which means you can only downgrade from the higher “Preferred” version of each ($95 annual fee) to the regular version ($0 annual fee). 

Here are the groupings for Amex Credit Card product changes:

Amex Everyday ($0 AF) <> Amex Everyday Preferred ($95 AF)

Cash Magnet ($0 AF) <> Amex Blue Cash Everyday ($0 AF) <> Amex Blue Cash Preferred ($95 AF)

Delta Blue ($0 AF) <> Delta Gold ($95 AF, waived yr 1) <> Delta Platinum ($250 AF) <> Delta Reserve ($550 AF)

Delta Business cards – Same as above, except no Blue Card

Hilton Honors ($0 AF) <> Hilton Surpass ($95 AF) <> Hilton Aspire ($450)

Marriott Bonvoy Brilliant ($450 AF) <> Marriott Bonvoy ($95 AF) Not open to new applicants, some have reported success downgrading to this card, but it not guaranteed.

 

Annual Fee Refunds

Important to note, American Express credit cards’ annual fees are pro-rated monthly, for example if you have The Platinum card with a $550 annual fee and you downgrade six months after paying an annual fee you’ll get a $275 refund. 

 

Downgrade Amex Business Credit Card

While you can’t downgrade your Amex business card to a personal cards and vice versa, you can downgrade to a lower or no fee business credit card, as long as it earns the same type of rewards. For example, The Business Platinum Card from American Express ($595 annual fee) can be downgraded to Business Gold or Green, and Delta Business cards can be downgraded within their system etc…

 

Downgrading one or all of your Amex credit cards is a great way to save on annual fees without having to close your account and hurting your credit score as a result. Switching to a more affordable option within the same credit card brand will also allow you to preserve the points you’ve earned and later redeem them for travel or for daily essential purchases

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