When to Cancel or Downgrade Credit Cards
Knowing when to cancel a credit card after earning the bonus is just as important as knowing which card to apply for. Cancel too early and you waste potential value from card benefits. Cancel too late and you eat an unnecessary annual fee. This guide covers the exact timing, retention offer scripts, downgrade paths, and a complete pre-cancellation checklist so you never leave money on the table.
The Cancel/Downgrade Timeline
Every churned card follows a predictable lifecycle. Understanding this timeline lets you extract maximum value from each card while avoiding fees you did not plan for. Here is the month-by-month breakdown:
Your only goal during this period is to hit the minimum spending requirement organically. Use the card for all everyday purchases — groceries, gas, dining, subscriptions, and bills. Once you meet the threshold, the sign-up bonus typically posts within 1-2 statement cycles. Do not stop using the card entirely after meeting the spend, as issuers track engagement.
Take full advantage of the card's perks during this period. Use travel credits, lounge access, purchase protections, and category bonuses. There is no reason to rush toward cancellation. You have already paid the first year's annual fee (or it was waived), so extract every dollar of value from the benefits. Keep a small amount of recurring spend on the card to maintain activity.
About a month before your card anniversary, call the issuer and ask about retention offers. This is the single most important step in the cancellation process. Issuers frequently offer bonus points, statement credits, or reduced fees to keep you. If the offer exceeds the annual fee value, keep the card for another year and repeat the process at month 23.
If you did not get a worthwhile retention offer, downgrade to a no-fee card or cancel before the second annual fee posts. If the fee has already posted, do not panic — most issuers will refund the fee in full if you cancel or downgrade within 30 days (Barclays gives you 60 days). Set a calendar reminder so you never miss this window.
Always Ask for a Retention Offer First
Before you cancel any card, always call the issuer and ask for a retention offer. This is free money that most people leave on the table simply because they do not ask. Issuers spend hundreds of dollars acquiring each customer and would rather give you a small incentive than lose you entirely.
When you call, say something like: "I'm thinking about canceling my card because the annual fee is coming up and I'm not sure the card is worth it for my spending habits. Is there anything you can do to help me keep the card?" The representative will typically transfer you to a retention specialist.
Common Retention Offers
- ✓Bonus points: 10,000-30,000 points added to your account, sometimes with a small spending requirement
- ✓Statement credits: $50-$150 credited to your account, which can fully or partially offset the annual fee
- ✓Waived or reduced annual fee: The fee is eliminated or reduced for the coming year
Script for the Retention Call
Opening: "Hi, I'm calling about my [card name]. My annual fee is coming up and I'm considering whether it makes sense to keep the card. I enjoy the card but I'm not sure the fee is justified given my current spending."
If they offer nothing: "I understand. Are there any promotions or offers available that might make it worthwhile for me to keep the card another year?"
If the offer is weak: "I appreciate that, but I've seen other offers in the range of [higher amount]. Is there anything else available?"
Decision rule: If the retention offer exceeds the annual fee value, accept and keep the card for another year. If not, proceed with a downgrade or cancellation.
Pro tip: Amex is known for generous retention offers, especially on the Platinum and Gold cards. Chase retention offers vary but are worth asking for. If you do not get an offer on the first call, try calling back another day — different representatives have access to different offers.
Downgrade vs. Cancel: Which Is Better?
When it is time to get rid of a card, downgrading (also called a product change) is almost always the better option. Downgrading converts your card to a different product from the same issuer — ideally one with no annual fee. This preserves your credit limit, which keeps your utilization ratio low, and preserves your account age, which helps your average age of accounts. Both of these factors protect your credit score.
Only cancel when the issuer does not offer a suitable no-fee downgrade option. Even then, consider whether maintaining the relationship with that issuer is worth keeping the card open for future applications.
Common Downgrade Paths
| Premium Card | Downgrade To | Annual Fee |
|---|---|---|
| Chase Sapphire Preferred / Reserve | Freedom Unlimited or Freedom Flex | $0 |
| Amex Gold | Amex Green (then cancel) or Amex EveryDay | $0* |
| Amex Platinum | No good downgrade available (must cancel) | N/A |
| Citi Premier | Citi Double Cash or Citi Custom Cash | $0 |
| Capital One Venture X | VentureOne | $0 |
| Chase United Explorer | United Gateway (no fee) | $0 |
| Barclays AAdvantage Aviator Red | No downgrade available (must cancel) | N/A |
*Amex EveryDay has no annual fee. Amex Green has a $150 fee so you would need to cancel the Green after downgrading if your goal is to avoid fees entirely.
Important for Chase churners: If you plan to churn the Chase Sapphire again in 48 months, downgrade your Sapphire to a Freedom card rather than canceling. When it is time to re-apply, you already have the account history and can simply apply for a new Sapphire card. The same logic applies to the Chase Ink business cards — downgrade to the no-fee Ink Cash or Ink Unlimited.
Annual Fee Refund Windows by Issuer
If your annual fee has already posted and you missed the window to cancel beforehand, do not worry. Every major issuer offers a grace period during which you can cancel or downgrade and receive a full refund of the annual fee. Here are the current refund windows:
Chase
30 days for a full refund after the annual fee posts. Some data points suggest Chase may honor requests up to 41 days, but 30 days is the official policy. Call as soon as you see the fee on your statement.
American Express
30 days for a full refund. Amex is strict about this window. After 30 days, you will not receive a refund and will owe the fee for the full year. Note that canceling an Amex card too early can trigger a clawback of the sign-up bonus.
Citi
30 days for a full refund. Citi is straightforward with their refund process. You can request the downgrade or cancellation via secure message or by calling the number on the back of your card.
Capital One
30 days for a full refund. Capital One product changes can be done online through your account settings in some cases, though calling is more reliable for getting the exact product you want.
Barclays
60 days for a full refund — the most generous window of any major issuer. This gives you extra time if you miss the initial 30-day mark. However, Barclays has limited no-fee downgrade options, so cancellation is often the only choice.
US Bank
30 days for a full refund. US Bank has a smaller card portfolio, but the Altitude Reserve and Altitude Connect both carry annual fees. Downgrade options are limited, so check what is available before calling.
Impact on Your Credit Score
One of the most common fears about canceling a credit card is the impact on your credit score. The good news is that for most people with established credit histories, the impact is modest and temporary. Here is exactly what happens:
Credit Utilization Ratio
Canceling a card removes that card's credit limit from your total available credit. If you carry balances on other cards, this increases your utilization ratio, which can lower your score. For example, if you have $50,000 in total credit and cancel a card with a $10,000 limit, your available credit drops to $40,000. If you carry $4,000 in balances, your utilization jumps from 8% to 10%.
Average Account Age
Closing an older card can reduce the average age of your accounts. However, closed accounts remain on your credit report for up to 10 years and continue to age during that time (under FICO scoring models). The impact on average age is therefore delayed and often minimal in the short term.
Typical Score Impact
Most churners see a 5-15 point drop when canceling a card, and the score recovers within 2-3 months as other positive factors (on-time payments, aging accounts) offset the change. If you have 10+ cards and strong credit history, the impact is often negligible.
How to Minimize Impact
Downgrade instead of cancel — this preserves both your credit limit and account age. If you must cancel, pay down balances on other cards first to keep your utilization ratio low. Avoid canceling your oldest card if possible. And never cancel a card right before applying for a mortgage, auto loan, or other major credit application.
Bottom line: For active churners with multiple cards and low utilization, canceling a single card has minimal impact on credit score. The annual fee savings almost always outweigh the temporary score dip. Read more about managing your credit while churning in our complete churning guide.
The "Keep One Card Per Issuer" Rule
A key principle for long-term churning success is to always maintain at least one open card with each major issuer — Chase, Amex, Citi, and Capital One. This preserves your banking relationship and keeps the door open for future approvals and bonus offers.
Issuers are more likely to approve new applications from existing customers in good standing. If you close every card with an issuer, you lose that relationship history and may face stricter approval criteria when you apply again.
Best No-Fee Cards to Keep Long-Term
- ✓Freedom Unlimited (1.5x on everything)
- ✓Freedom Flex (5x rotating categories)
- ✓Blue Cash Everyday (groceries)
- ✓Amex EveryDay (flexible MR points)
- ✓Double Cash (2% flat cash back)
- ✓Custom Cash (5% top category)
- ✓VentureOne (1.25x miles)
- ✓Quicksilver (1.5% cash back)
These no-fee cards cost you nothing to hold and serve as placeholders for your relationship with each issuer. Use each one for a small recurring charge (like a streaming subscription) and set up autopay so the card stays active without any effort on your part.
Checklist: Before You Cancel a Credit Card
Before you pick up the phone to cancel or downgrade, walk through this checklist to make sure you do not lose any value or create problems for yourself down the road. Missing a step can mean forfeiting points, getting hit with surprise charges, or creating unnecessary headaches.
Transfer or redeem all accumulated rewards before canceling. With some issuers (like Chase), points are forfeited when you close the card unless you transfer them to another card in the same rewards ecosystem. Amex Membership Rewards points are also forfeited unless transferred to a remaining MR-earning card. Do not let points expire or get lost.
Remove authorized users from the account before closing. Authorized user accounts may remain on their credit reports even after the primary account is closed, which can cause confusion or issues with future applications.
Move all recurring charges (subscriptions, bills, insurance) to a different card. If a charge hits a closed card, it may be declined or, worse, the issuer may reopen the account to process it. Check your last 12 months of statements to catch annual subscriptions you might forget.
Call the number on the back of your card and ask for a retention offer. If the offer exceeds the annual fee in value, keep the card another year. This step alone can be worth hundreds of dollars over a churning career.
If no worthwhile retention offer is available, ask to downgrade to a no-annual-fee card. Refer to the downgrade paths table above. Downgrading is always preferable to outright cancellation because it preserves your credit limit and account age.
If the issuer has no suitable no-fee product (like Amex Platinum or Barclays AAdvantage), proceed with cancellation. Confirm on the call that the account will be closed and that any posted annual fee will be refunded.
Make sure the card has a zero balance before closing. If you have a remaining balance or pending transactions, the closure may be delayed or you may continue to accrue interest. Pay off any outstanding balance and wait for pending charges to clear.
Ask the representative to send you written confirmation that the account has been closed (or downgraded) and that any annual fee has been refunded. This protects you if there are any disputes later. Most issuers will send a confirmation letter or email.
Pull your credit report about 30 days after cancellation to verify the account shows as "closed by consumer" (not "closed by issuer," which can look negative). If it reports incorrectly, dispute it with the credit bureau. The account should remain on your report for up to 10 years with its full positive payment history.
Putting It All Together
The cancel/downgrade decision is a core part of the credit card churning cycle. When you approach it methodically — calling for retention, downgrading when possible, and maintaining issuer relationships — you maximize your rewards while minimizing costs and credit score impact.
Set calendar reminders for each card at month 11. Track your annual fee dates, retention offer history, and downgrade paths in a spreadsheet. Over time, this becomes second nature and takes just a few minutes per card each year.
The best churners are not just good at opening cards — they are disciplined about managing the full lifecycle. A well-timed cancellation call that lands a 30,000-point retention offer is just as valuable as the original sign-up bonus. Treat every annual fee renewal as an opportunity, not an obligation.
Frequently Asked Questions
When should I cancel a credit card after getting the bonus?
The ideal time to cancel or downgrade is around month 11-12, just before your second annual fee posts. This gives you a full year to use the card benefits after earning the bonus. If the annual fee does post, most issuers offer a full refund if you cancel within 30 days.
Should I cancel or downgrade my credit card?
Downgrading is almost always better than canceling. Downgrading to a no-annual-fee card preserves your credit limit (helping your utilization ratio) and your account age (helping your average age of accounts). Only cancel if the issuer has no no-fee product to downgrade to, such as with the Amex Platinum or Barclays AAdvantage cards.
Will canceling a credit card hurt my credit score?
Canceling a credit card can temporarily lower your credit score by 5-15 points. It reduces your total available credit (increasing your utilization ratio) and can lower your average account age. However, the impact is usually small and recovers within a few months. Downgrading avoids both of these issues entirely.
How do I get a retention offer?
Call the number on the back of your card and tell the representative you are thinking about canceling because the annual fee is not worth it for your spending habits. Many issuers will transfer you to a retention specialist who can offer bonus points (10,000-30,000), statement credits ($50-$150), or a reduced annual fee to keep you as a customer.
Can I get a refund on my annual fee?
Yes. If you cancel or downgrade after the annual fee posts, most issuers will refund the full fee within a specific window. Chase, Amex, Citi, Capital One, and US Bank all offer 30-day refund windows. Barclays is the most generous at 60 days. After the refund window closes, you are stuck with the fee for the year.
What should I do before canceling a credit card?
Before canceling, redeem all accumulated points or miles, remove any authorized users, update all autopay and recurring charges to a different card, call for a retention offer, and confirm your balance is zero. After canceling, get written confirmation and check your credit report after 30 days to verify the account shows as closed by the consumer.
How long should I keep a credit card before canceling?
Keep the card for at least 12 months. Canceling too early (before 12 months) can flag your account and damage your relationship with the issuer, potentially affecting future approvals. The sweet spot is month 11-12 when you can call for a retention offer and still cancel before the second annual fee posts.