Don’t Cancel Your Credit Card Just Yet! Here’s One Way You Can Still Afford to Keep Them
Considering the current state of things, some people may think that it would be best for them to just cancel credit cards to avoid paying fees, which may reach hundreds of dollars depending on the card.
While this decision may work well for certain individuals, canceling a card and foregoing all of its rewards and benefits should not be a person’s first thought. Read on to find out why.
Instead, credit card holders may want to consider simply downgrading their cards under the same provider. The good news is that people can expect credit card issuers to be flexible when they request a downgrade on their credit cards.
However, it’s important to know that there are no fixed rules about this route. So, before contacting their provider, one is recommended to do their due diligence and research for what kind of card they want to have.
Browse through all of the cards offered by the provider and see which ones have no or significantly smaller annual fees.
During the conversation, make sure to explain to them the reason behind the request to downgrade and clear that the old line of credit will be kept open. If a person is lucky, an issuer may even grant a customer the benefit of waiving their annual fee as a retention offer.
Those who do continue to downgrade their credit cards typically do so because of two reasons. One of them is that they know that this would be less damaging to their credit score.
The act of closing a card reduces the age of a person’s credit history and causes their credit utilization to rise, especially if they carry their remaining balances on their remaining cards. Meanwhile, downgrading won’t lead to any of these results.
Remember that the credit utilization accounts for 30% of the credit score while credit history accounts for 15%.
Rewards for Low Fees
Another perk of downgrading instead of canceling is that the credit card user gets to keep getting rewards. This time though, they’re paying no annual fees or a lower one if at all.
Meanwhile, there are also people who decide to downgrade to access the benefits that another card under the same credit card provider gives. Of course, qualifying for a lower annual percentage rate (APR) is also another reason.
More in Financial Advice
Top Ways You Can Give Your Thanksgiving Celebrations an Eco-friendly Spin
While the holiday season is upon us, it brings into offing the three goods, good food, good drink, and of course...December 14, 2020
Five Workout Ideas to Help You Let Off Some Steam!
Exercise gives your body a daily dose of endorphins to manage stress. As endorphins are happy hormones, they help you overcome...December 10, 2020
The Complicated Link Between Money and Health
New research has uncovered links between wealth and lifespan. This brings more truth to the iconic catchphrase ‘live long and prosper’...December 10, 2020
The Biggest Excuses For Not Saving Enough Money
Americans have the ‘reputation’ of not saving enough money for the future or so do the economists on the various talk...December 9, 2020
Five Tips from JK Rowling to Become Rich and Successful in Life
J. K. Rowling is a famous English writer who penned the Harry Potter series. Her mercurial rise to fame is nothing...December 8, 2020
The Best Saving And Budgeting Apps For Moms
Being a mom is a wonderful feeling. However, the joy might take a backseat when you start worrying about all that...December 7, 2020
How to be an Instagram Influencer and Become Rich and Famous
The modern world boasts a lot of celebrities and rich people but not necessarily in movie or television screens but in...December 4, 2020
All You Need To Know About Tax Filing: From Extension to Apps You Could Use!
The tax day has come and gone. The traditional date, which was April 15, has been pushed to July 15, thanks...December 2, 2020
How To Develop Your Small Business Strategy For 2021 Amidst The Pandemic Situation
The last quarter of the year 2020 has proved to be quite a nice period for businesses to reopen. With that...December 1, 2020