Understanding Credit Card Downgrades
Getting a new credit card is often an exciting process. But, things can change over time. That card might not suit your lifestyle like it once did. Yes, you can cancel it, but, well, that might hurt your credit score and you’d lose all those points you’ve earned.
One alternative is to downgrade your card. It’s worth considering, especially with something like the Citi StrataPremier® Card. It’s a mid-tier travel card with a $95 annual fee, which sounds reasonable, right?
While the fee is low, the primary benefit—$100 in hotel credits each year—comes with some strings attached. You’ll need to make hotel bookings of at least $500 through Citi Travel to access those credits. That’s, um, pretty limiting.
Alternatively, there’s the Citi Strata Card, previously known as the Citi Rewards+ Card. This card was recently rebranded and now offers a decent return rate.
If you’re pondering a downgrade, it’s important to weigh the reasons behind your choice. You might want to stick with your Citi points for use later on.
Keep Your Hard-Earned Points
By downgrading instead of canceling the Citi Strata Premier, you can keep your rewards. If you go ahead and cancel your card, the points you’ve gathered could disappear.
This means downgrading allows you to protect your Citi points while moving to a card that’s more manageable.
The reality is, the value of your Citi points can vary significantly. While you can still transfer them to many partners, the exchange rate isn’t always great.
With the Citi Strata, you can still use your points for cashback, gift cards, or shopping at certain retailers, which, honestly, helps soften the blow.
Last year, I advised a friend to downgrade his Strata Premier card to avoid those pesky annual fees and keep his significant stash of reward points. It paid off; when he needed to book a flight later, he was able to transfer his points without losing them.
Don’t Stress About Missing Welcome Offers
New applicants for the Citi Strata Card can snag 30,000 points after spending $1,000 in the first three months, which is roughly valued around $570. But if you downgrade from the Prime Minister card, you can kiss that welcome offer goodbye.
It’s a bummer, sure, but compared to newer cards—like the Citi Strata Elite Card which dangles a whopping 80,000 points for spending $4,000—you might not be missing out as much as it seems.
Getting Similar Earnings
The Citi Rewards+ card has been redesigned, making it similar in return rate to the Strata Premier—so you won’t lose out on earning potential. Its bonus categories include:
- 5 points per dollar spent on hotel bookings, car rentals, and attractions via the Citi Travel website
- 3 points per dollar at gas stations, supermarkets, and charging stations
- 3 points on select self-identified categories like fitness clubs or streaming services
- 2 points per dollar at restaurants
- 1 point on everything else
You might find those self-selected categories handy after a downgrade since you can change them every quarter to match your spending habits.
Will I Get a Refund on My Annual Fee?
If you downgrade, you might even get a refund on your annual fee, provided you do so shortly after the fee posts. It’s worth checking the specifics with Citi.
Maximize Your Card Benefits
Another strategy to think about is having both the Citi Geologic Card and the Strata Premier. This could let you rack up even more points and take advantage of different benefits. For example:
- You can earn additional welcome bonuses, provided you meet the criteria.
- More points on specific purchases with the Strata.
- Use the Premier for the other bonus categories.
- Better transfer rates with partners.
Conclusion
It’s a smart idea to regularly review your credit cards. Keep an eye on what’s working and what isn’t. The best time to evaluate the value of a card is when that annual fee rolls around. For cards like the Citi Strata Premier, downgrading to something like the City Geologic Card might be the better option, especially if you’re looking to maintain your points.
So, weigh your options—maximizing both cards could be beneficial and enhance your experience within the Citi points ecosystem.
