According to FM, you can now log in to your Citi online banking account and use online chat to product change your card. It will also show all available product change options, which is very convenient. Calling customer service often wastes a lot of time.

  • There is now a direct option for product changing your card
  • The representative directly lists all available product change options

What Is a Product Change? Why Do Banks Allow It?

A product change is a sort of hidden service banks offer to credit card users. Simply put, if you are tired of a card, you can call the bank and ask them to convert it into a different card. Of course, all of the original card’s features will change to those of the new card, but the account’s payment history and opening date will be preserved. For example, if you currently have a Citi AAdvantage credit card and the first-year annual fee waiver is about to end, you may not want to pay the annual fee, so you call and change it to a Citi Double Cash credit card. The original card’s benefits, such as priority boarding, free checked bags, and earning AA miles, would disappear and be replaced by the 2% cash back offered by Double Cash.

Why do banks allow product changes? In my opinion, banks mainly issue credit cards to earn interest from customers and interchange fees from merchants after customers use their cards. A product change is basically just swapping one set of benefits for another. Banks generally do not care much about that change in perks, because each credit card has its own team, and serving one more or one fewer customer does not make much difference. But if a customer closes the card, the bank loses the potential to earn future interest and swipe fees.

Why Product Change a Card?

For banks, product changes help retain customers and preserve future profit opportunities. But for points-and-miles users, a product change is a way to avoid annual fees and get better long-term value. One very important point is this: a product change does not cause a hard pull and does not create a new account. Common reasons for product changing a card include the following:

Avoid the annual fee + preserve your history + stay on good terms with the bank

Many credit cards, especially airline co-branded cards and hotel co-branded cards, often raise their welcome bonuses and waive the first year’s annual fee to attract customers. Sometimes, when we apply, we do not really care about the card’s long-term holding value; we just want the sign-up bonus. The easiest way to avoid the annual fee is to close the card, but if you do that, you are essentially throwing away a year of credit history. For people with a shorter credit history, that can have a fairly large impact on their credit score. Also, closing a card right after getting the bonus may leave a bad impression with the bank. There are not many examples, but some people who pushed too hard have ended up in the bank’s “penalty box.”

So converting the card to a no-annual-fee card and keeping it long term can be a very good move. After a product change, all your prior records are preserved, including payment history and credit history. From the bank’s perspective, your account is not the card number itself, but an independent account number. That is unrelated to the specific card product. You can think of the credit card product as just a shell: you changed the shell, but the underlying account stays the same.

Get new benefits

Giving up old benefits in exchange for new ones is another reason to product change. For example, I used to have the Citi Dividend credit card, but I felt the quarterly 5% cash back was not useful for me. I would rather have a Double Cash card that earns 2% cash back on all purchases. So I called and changed my Dividend, which I had held for more than two years, into a Double Cash. All of the account history automatically transferred to the new card, and there was no hard pull. I basically turned an unused card into a card I use regularly for everyday spending.

Preserve points

Another reason to product change is to preserve points. For example, suppose you have an AMEX EveryDay Preferred (EDP) credit card and after a year you decide you do not want to keep paying the annual fee. If you do not have any other credit card that earns Membership Rewards (MR) points, closing the card would cause your MR points to expire. But maybe you do not need to use those points right now, and you also do not want to transfer them to airline miles and give up the flexibility of MR points. In that case, changing the card to the no-annual-fee AMEX EveryDay Card (ED) credit card solves the problem. The new card has no annual fee, still earns MR points, and still lets you transfer MR points to airline partners.

Get multiple copies of the same card

Product changes can also serve a special purpose: getting multiple copies of the same card. A typical example is downgrading from the Chase Sapphire Preferred (CSP) credit card to the Chase Freedom Flex credit card after holding it for one year. Because Chase does not allow you to apply for Freedom if you already have a Freedom card, a product change cleverly gets around that restriction. Through a product change, you can end up with two Chase Freedom Flex credit cards. Some people want two because the Chase Freedom Flex credit card earns 5x cash back each quarter in rotating categories, but the bonus is capped at the first $1,500 in spending. So if you have two Chase Freedom Flex credit cards, you can earn 5x on up to $3,000 in spending each quarter.

Reduce the cost of closing a card

Suppose you have an AMEX Platinum credit card with an annual fee of $895, and you are planning to close it at the 2.5-year mark. In that case, the final half-year of the annual fee would not be refunded. That is because AMEX’s rule is that after 30 days from the fee posting, it will not refund the fee, whether full or prorated. At that point, you could change the AMEX Platinum credit card to the lower-fee AMEX Green Card (annual fee $150). Under AMEX rules, after a product change, the annual fee is refunded on a prorated basis, so you would get half of the annual fee back. Then you could close the AMEX Green card.

Upgrade offers

AMEX cards periodically offer upgrade bonuses, such as upgrading from AMEX Green to AMEX Gold, or from AMEX Gold to AMEX Platinum, sometimes with offers as high as 125,000 points. So if you see an offer like this in your account, you can apply for it while you are at it. But upgrade offers usually come with a spending requirement, so be sure to read the details carefully.

How Product Changes Affect Your Credit Card Application Strategy

Understanding product changes can have a major impact on how you choose which credit cards to apply for.

Do not apply for a card just because it has strong long-term value:

You should first apply for a card with a high sign-up bonus, earn the bonus, and then later change it to a card with better long-term value. For example, you should not apply specifically for the Citi Double Cash just because it offers 2% cash back, since its sign-up bonus is not very strong. Instead, you should take a more indirect approach: first apply for a Citi AAdvantage credit card (with a 50,000-80,000 AA miles sign-up bonus) or a Citi Premier credit card (with a 60,000 ThankYou Points sign-up bonus), and then in the second year change it to a Citi Double Cash to get a no-annual-fee card with long-term 2% cash back.

Do not avoid applying just because a card has an annual fee:

For some cards, even though they carry an annual fee, the welcome bonus is higher than the no-annual-fee version, and the benefits are also better. If you are sure you do not want to keep paying an annual fee long term, you can first apply for the annual-fee version, earn the higher welcome bonus, enjoy the better perks, and then product change to the no-annual-fee version to keep for the long haul. A very typical example is the AMEX Blue Cash Preferred (BCP) card (welcome bonus of $250-$300) and the Blue Cash Everyday (BCE) (welcome bonus of $200-$250). Although BCP has a $95 annual fee in the first year, the welcome bonus is a bit higher, and it also earns 6% at supermarkets, which is much better than BCE’s 3% at supermarkets. So you can absolutely apply for BCP first and then downgrade later.

Each bank’s product change policy

If you want to product change, calling the customer service number on the back of your card is the fastest way. Of course, you can also product change through online chat or secure message.

AMEX

  • Product change rules: Cards within the same family can usually be converted between each other. For example, you can switch between Blue Cash Preferred (BCP) and Blue Cash Everyday (BCE); between Premier Rewards Gold (PRG) and Platinum (PLT); and between EveryDay Card and Everyday Preferred. Note that Charge cards (PRG, PLT) cannot be converted to or from Credit Cards (such as EDP). Since these are the same card family, cashback and points are preserved after the product change.
  • Upgrade offers: Sometimes when you upgrade from a no-annual-fee version to an annual-fee version, there is an upgrade offer. For example, when upgrading from the no-annual-fee Hilton card to the annual-fee Hilton Surpass card, you may be able to get a 50,000-point/100,000-point upgrade offer through a targeted link in your account. Downgrades generally do not come with any bonus. Right now, almost all AMEX card families have upgrade offers available eventually; you just need to wait.
  • Restrictions: Within the same AMEX family, one card is generally an annual-fee version and one is a no-annual-fee version. You can downgrade from the annual-fee version to the no-annual-fee version at any time, but to upgrade from the no-annual-fee version to the annual-fee version, you generally need to have held the no-annual-fee card for one year first. The annual fee is charged 45 days after the product change.

Barclays

  • Product change rules: You can product change within the same card family, but not across different card types.
  • Product change bonus: You may sometimes receive a small bonus for product changing; ask customer service for details.

BofA

  • Product change rules: Cards issued directly by BofA can generally be converted among each other. Co-branded cards can also be converted to BofA’s own cards after one year.
  • Product change bonus: In very rare cases, there may be a product change offer in your account.

Chase

  • Product change rules: Chase’s own cards can be converted among each other. The four in-house products—Freedom Flex, Chase Sapphire Preferred , Slate, Freedom Unlimited—can be product changed among each other. However, other airline and hotel co-branded cards cannot be converted into these cards. For example, UA and IHG both have no-annual-fee versions you can downgrade to.
  • Product change bonus: Recently some people received emails saying that converting Chase Freedom to Freedom Unlimited would earn a $50 bonus. If you are interested, you can call customer service and ask whether you have such an offer.
  • Restrictions: You need to have held the original card for at least one year before product changing. If you want to convert to a Visa signiture version, your original credit limit must be above $5,000.

Citi

  • Product change rules: Basically, most cards can be converted among each other, including Citi Costco. There is no bonus for product changing.
  • Restrictions: The card being converted must have been open for more than one year, and it cannot currently be in a 0 APR promotional period.

Discover

  • Product change rules: Discover it, Chrome, and Discover Miles can be converted among each other. A product change does not qualify for the new-card first-year Cashback Match bonus.

US Bank

  • Product change rules: Personal cards can be converted to other personal cards, and business cards can be converted to other business cards.

Extra stacked benefits from product changes

Chase bonus multipliers on spending

[Updated 2020.6] Recently, quite a few readers reported that their Sapphire Reserve earned 9x points at supermarkets. What’s going on? Here’s the explanation:

  • Reason: Their Sapphire Reserve was upgraded from a Chase Freedom. Chase Freedom itself had 5x cashback at supermarkets in Q2, and once activated, that promotion stays with the card, so even after a product change the offer remains until the end of the quarter. During the pandemic, Sapphire Reserve also had a special benefit of 5x UR at supermarkets. So why is it 9x instead of 10x? This comes down to how Chase calculates bonuses: usually it is base + bonus. In other words, Freedom’s quarterly 5x is actually 1x + 4x, and CSR supermarket earnings work the same way. So the final result is 1x + 4x + 4x = 9x.
  • Formula: 4x (carried over from Freedom, valid through Q2, meaning through the end of June) + 4x (CSR’s extra supermarket bonus, apparently capped at upto $1,500 per month, available in May and June) + 1x (base point) = 9x
  • Tip: If you also got it this way through a product change, remember to maximize your supermarket spend. CSR has a $1,500 cap this month, while Freedom’s cap is calculated by quarter.
  • Tip 2: In the future, remember to activate your quarterly 5x on Freedom before product changing it. Even after the conversion, you can still keep earning 5x.

BofA product changes can preserve the no-FTF feature

If you convert a credit card with no Foreign Transaction Fee (FTF) into another card, the no-Foreign Transaction Fee feature can sometimes be preserved. For example, BofA Travel Rewards normally has no FTF, while the BofA Customized card does charge FTF. In that case, if you convert Travel Rewards into the Customized card, you not only get the Customized card’s self-selected quarterly 5x feature, but you may also keep the no-FTF feature.

Things to watch out for when product changing

Product changes sound great, but you should pay attention to the following points when doing one:

  • Welcome bonus implications: After product changing into a new card, the old card is effectively changed (roughly equivalent to closing the old account), which can affect your eligibility for welcome bonuses. Citi cards use a 24-month clock based on opening or closing cards, and you cannot get the welcome bonus on a new card if you are within that window. So after a product change, the 24-month clock for both the old card and the new card may effectively reset. A product change does not qualify for the new card’s welcome bonus.
  • Reversing a product change: A product change can be reversed. If you change your mind, you can call within a certain period of time and switch it back.
  • Rewards Program changes: After a product change, the Rewards Program may also change, so it is best to use up your points or rewards before making the switch.
  • Customer service has the final say: Follow whatever the customer service representative tells you. If they say the transfer is not allowed, you can try calling again a few times and ask another rep.

Tips Series Articles