Can I downgrade from Sapphire Reserve to Preferred?

The Chase Sapphire Reserve card is one of the most exclusive and lucrative credit cards you can get. Cardholders earn 3x points on travel after consuming the $300 travel credit, 3x points on dining at restaurants, and 1x points on everything else with no cap on the total amount of points you can earn. With benefits like $400+ in statement credits, free Lyft Pink and Doordash DashPass, extensive lounge access, and point transferability, this card blows most other credit cards out of the water. However, the Sapphire Reserve card comes at a steep price. With a $550 annual fee and an extra $75 per year for each additional user, this card is extremely expensive for someone looking for a midrange credit card. You can read the full review here. 

So you got the Chase Sapphire Reserve card, but you are now realizing that it's too expensive, what can you do?

You have two options: 

• Cancel the card
• Downgrade to the Chase Sapphire Preferred card

If you choose to cancel the card and open a new one, you have to keep in mind that this new card will count towards the Chase 5/24 rule. This rule prevents you from opening more accounts with Chase if you have already opened five credit card accounts in the past twenty-four months. However, if you choose to downgrade, you will not be required to open a new account and the 5/24 rule will not be affected. 

Also, if you cancel your credit card, your credit utilization ratio can be affected, which can drop your credit score. Your credit utilization ratio is a measure of how much credit is available to you compared to how much is used. If you cancel the large credit line that this card offers, your ratio will increase, which may decrease your credit score in the short-run. 

The forfeiture of all rewards is another drawback of canceling this card. 

Therefore, in most cases, downgrading to the Preferred card is a better option. With only a $95 annual fee and solid rewards, the Chase Sapphire Preferred card offers a great deal to people looking to cut down on fees-related expenses. The card offers 2x points for travel and dining and 1x points for all other purchases. In addition, it provides similar perks as the Sapphire Reserve card such as Lyft rewards and DashPass. You can read the full review here. 

It is important to keep in mind, however, that you will not qualify to receive a signup bonus if you downgrade from the Reserve card to the Preferred card. Chase requires you to wait for 48 months after receiving a signup bonus before you can qualify to receive another one. 

In conclusion, you can definitely downgrade to the Chase Sapphire Preferred card if you are struggling to pay the annual fee of the Sapphire Reserve card. You can receive similar benefits at a fraction of the cost without affecting your credit score.