Consumers who want to switch credit cards have several options available to them. They can always search and apply for a new card, but those who already have an existing card can also try upgrading or downgrading to another product from the same issuer.
Upgrading a credit card makes sense when a card issuer offers another card option with better benefits or rewards that fit your spending. When you upgrade instead of applying for the credit card, you can benefit from moving your open line of credit to the new card instead of opening a separate account.
Downgrading a card is a common alternative for consumers who want to stop paying an annual fee or need to target different reward categories. Similar to upgrading, downgrading your card allows you to move your line of credit to a new card without opening a new account.
Can I upgrade or downgrade my American Express credit card?
From time to time, American Express has been known to send direct mail to their current customers with the option of upgrading to a new card product. Outside of receiving a formal invitation, American Express has some hard and fast rules that can make it difficult for you to upgrade or downgrade your card with them.
Upgrade or downgrade eligibility for American Express
For starters, you can only upgrade or downgrade an American Express credit card that earns the same type of rewards. This makes sense since many Amex cards let you earn cash back, yet plenty of others let you earn points in the American Express Membership Rewards program.
Another instance where switching cards would be problematic lies within the co-branded card options from American Express. It would get complicated if you were trying to upgrade or downgrade a Hilton Honors credit card to a Delta credit card, for example. Moving among cards with different types of rewards would make the process rather messy, so American Express doesn’t allow it.
You also cannot switch a credit card to an American Express charge card, or vice versa. Charge cards are a type of card that requires you to pay your balance in full each month, whereas credit cards let you carry a balance from month to month.
Finally, your American Express account needs to be in good standing if you hope to upgrade or downgrade. This means you have made your payments on time and have shown responsible usage of credit, which is a given.
Does upgrading or downgrading affect your credit score?
One major reason consumers opt to upgrade or downgrade their cards is the fact this action doesn’t have an effect on your credit score. We all know that “new credit” makes up 10% of your FICO score, and that new hard inquiries are counted against you. Since you already have access to the underlying line of credit you are hoping to transfer to a new card, the card issuer doesn’t have to place a new hard inquiry on your credit report.
Many consumers also downgrade a credit card to a no-annual-fee option instead of cancelling their card altogether to protect their credit score. Where cancelling a credit card can reduce the amount of open credit you have, thus increasing your credit utilization, upgrading or downgrading your card doesn’t come with this major downside. Since the amounts you owe in relation to your credit limits make up 30% of your FICO score, this factor is even more important.
Should you upgrade your American Express credit card?
Upgrading a credit card can make sense, but you could give something up if you upgrade cards instead of applying for the new card you want separately. Of course, the pros and cons of upgrading depend a lot on the card you have and the card you want.
Upgrading from the American Express® Gold Card to The Platinum Card® from American Express
Here’s an example of a popular upgrade between Amex cards and the potential advantages and disadvantages. Let’s say you have the American Express® Gold Card and you really want The Platinum Card® from American Express. What do you have to lose, and what do you have to gain?
Advantages of upgrading
- You could gain access to the superior benefits that come with the The Platinum Card® from American Express, such as up to $200 in uber credits, broad access to airport lounges worldwide and the up to $200 airline fee credit
- You could switch earning structures with your card; where the American Express® Gold Card lets you earn more rewards at U.S. supermarkets and restaurants each year, The Platinum Card® from American Express shines due to the 5x points you earn on flights booked with airlines or flights and prepaid hotels booked through American Express Travel
- You could qualify for a fee credit for Global Entry or TSA Precheck, which the American Express® Gold Card does not offer
- Qualify for Gold status with Hilton Honors and Marriott Bonvoy once you have The Platinum Card® from American Express
Disadvantages of upgrading
- You wouldn’t earn the welcome bonus on The Platinum Card® from American Express, which is a huge downside
- You would lose the up to $120 dining credit the American Express® Gold Card offers
- You would have to pay the $550 annual fee on The Platinum Card® from American Express, even without the value of a welcome bonus
Should you downgrade your American Express credit card?
Downgrading an American Express credit card is a popular option when you want to avoid an annual fee, or when you at least want to pay a lower annual fee. This usually happens when consumers no longer use the benefits and perks their American Express credit card offers, or when someone’s financial situation changes enough that they prefer not to pay a high annual fee anymore.
Downgrading from the Delta SkyMiles® Gold American Express Card to the Delta SkyMiles® Blue American Express Card
Here’s an example of a popular downgrade among American Express credit cards, including the factors people really should consider. What does someone stand to gain when they downgrade from the Delta SkyMiles® Gold American Express Card to the Delta SkyMiles® Blue American Express Card? And what do they stand to lose?
Advantages of downgrading
- The Delta SkyMiles® Blue American Express Card doesn’t charge an annual fee
- Downgrading can allow you to avoid cancelling a credit card and affecting your credit utilization
Disadvantages of downgrading
- You won’t earn the welcome bonus on the Delta SkyMiles® Blue American Express Card
- The Delta SkyMiles® Blue American Express Card has a lower earning rate than the Delta SkyMiles® Gold American Express Card, which means you might earn miles at a much slower pace
- Downgrading means losing out on Delta SkyMiles® Gold American Express Card benefits like the no fee for first checked bag, and Main Cabin 1 priority boarding on delta flights
- Downgrading also means losing the ability to use the Delta Pay with Miles feature
When is a good time to upgrade or downgrade your credit card?
Generally speaking, you should wait at least a year to ask about upgrading or downgrading your credit card. This is due to the fact that Amex has been known to reduce or decline welcome bonuses from consumers who have moved too quick. If you signed up for The Platinum Card® from American Express, earned the generous welcome bonus and then immediately tried to downgrade your card, for example, American Express could easily take your bonus back and even cancel your card. The exact wording in the terms and conditions of this card offer tells the whole story:
“If we in our sole discretion determine that you have engaged in abuse, misuse, or gaming in connection with the welcome offer in any way or that you intend to do so (for example, if you applied for one or more cards to obtain a welcome offer(s) that we did not intend for you; if you cancel or downgrade your account within 12 months after acquiring it; or if you cancel or return purchases you made to meet the Threshold Amount), we may not credit the Membership Rewards® points to, we may freeze the Membership Rewards® points credited to, or we may take away the Membership Rewards® points from your account. We may also cancel this Card account and other Card accounts you may have with us.”
Second, the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 does not allow card issuers to increase the annual fee or other finances on a card within the first year. This is yet another reason you’ll want to wait a year before you try to upgrade your card.
Also note that American Express has a “once in a lifetime rule” that can make upgrading in particular somewhat problematic. This rule states that if you have had an Amex card product before, you are ineligible for the welcome bonus. This means that upgrading to the Platinum Card® from American Express prevents you from earning the welcome bonus, but that you also cannot apply for this card and earn it later, even a few years down the line. Here’s what the terms and conditions for this card explicitly state:
“Welcome offer not available to applicants who have or have had this Card. We may also consider the number of American Express Cards you have opened and closed as well as other factors in making a decision on your welcome offer eligibility.”
This doesn’t mean that you should never upgrade. You should just think long and hard about the potential downsides, including missing out on a welcome bonus altogether, before you do.
How to upgrade or downgrade your American Express credit card
If you want to upgrade or downgrade your Amex card, the best next step to take is calling in to ask. Reach out using the customer service number on the back of your credit card, and a customer service representative will be able to help you go over your options.
American Express also has a helpful online chat feature you can use to see about upgrading or downgrading your card. However, you may still be asked to call in depending on your unique situation.
Make the most of your upgrade or downgrade
Whether you choose to upgrade to a credit card with better perks or downgrade in order to save money on annual fees, there are steps you can take to make the most of the transaction. Here are some additional tips that can help you upgrade or downgrade in a way that benefits you.
Timing is everything
Make sure you time your upgrade or downgrade in a way that helps you minimize fees.
If you plan to upgrade, on the other hand, you’ll also want to wait at least a year due to the rules enacted by the CARD Act of 2009.
Ask about rewards transfer
If your current credit card has a rewards balance you want to keep, make sure you ask about the transfer of those rewards ahead of time. Some upgrades or downgrades within the same program may not result in any change at all. On the flip side, there may be instances where the value of your rewards will change due to the new card option you chose. Either way, find out definitively before you make a move you cannot undo.
Check eligibility for bonuses
Typically, you become ineligible for a credit card welcome bonus when you upgrade or downgrade a card instead of applying for a new account. However, you can always call the card issuer and ask them to make an exception. It’s possible they’ll allow you to earn a new bonus, but you’ll never know unless you ask.