Question: Can I Downgrade the Amex Platinum Card After 1 Year?
Our question this week is about if/when/how to downgrade the Amex Platinum card. Is it possible? When? What are the options? There is a lot to unpack in just a short question here, so let’s jump in.
The Question
Our question of the week comes from Jim in our Facebook group:
Recommended strategy if you want to downgrade your consumer Amex Platinum card after exactly 1 year and you already hold the Amex Gold card. Is there a downgrade path or do you just cancel? Will the Rat come after me for just holding the card 1 year?
So we’re all on the same page:
- Jim has the Platinum Card from American Express and is on the fence for “cancel vs downgrade”
- American Express bank rules
- RAT = Rewards Abuse Team
- Amex can claw back your points if you close/downgrade a card within 1 year of receiving a bonus via welcome offer, retention offer, upgrade offer, etc.
Downgrade Options for Amex Platinum
If you want to downgrade a card, most banks require that this card be within the same family. For instance, American Express won’t allow you to change or downgrade a Hilton credit card to a Delta card. Citi is unique in this, as they allow you to change pretty much any personal card to another type, but you can’t do this with their business cards.
Thus, if you want to downgrade the Amex Platinum card, it has to be something that is in the same family:
Notice that there are no “no annual fee” options for downgrades in this family of cards.
Downgrade vs Cancel
Now that there’s no “no fee” option, many people may start to wonder whether they should downgrade or cancel a card. There are some factors to consider here:
- Preserving your credit history by keeping that card open, even in a downgraded form.
- If you have any other card from that bank that will keep your points from disappearing (this doesn’t matter with co-brand cards from airlines or hotels, where your points are safe in a loyalty program).
- Affecting your “total available credit”, which is an important part of your credit history; maybe you should move the credit from this card to another at that bank before closing the card.
- Upsetting the bank by constantly closing cards, especially if you always close their cards right at the 1 year mark.
- Losing your points by closing or downgrading the card before the time you committed to when applying for some type of bonus offer (typically 1 year).
- Keeping cards open in different American Express card type families, since they tend to send out upgrade offers.
I covered all of these in detail in another article, which you can read here: Should You Cancel Or Downgrade Your Credit Card? Factors To Consider.
Specifically with American Express, it’s really important to remember their “once in a lifetime rule”. Thus, if you have the Platinum version of a card now and downgrade to the Gold, you become ineligible for the welcome offer on that card later on. Why? You “had” the card. Sure, you didn’t get a new cardmember welcome bonus, but that doesn’t matter. Make sure your downgrade actions don’t make you ineligible for a card later on, because you’ll be sad if you do.
Amex RAT
Now that we have the science-y stuff out of the way, here’s the unpredictable part. None of us knows exactly why RAT does what it does. Look at the fact they just shut down accounts for people who applied for offers that came to them in their own names! Insanity.
Apart from these glaring moments of nonsense, the Rewards Abuse Team is supposed to (in theory) find and shut down people who do a few things:
- Constantly open and close cards only for the bonuses, not really using the cards for anything but that.
- Get bonuses and then close the cards without keeping them for the entire time stipulated in the terms.
- Earning welcome offer bonuses with cash-like transactions, such as sending money to a friend or other things that aren’t really “purchases”
We’ve already addressed the other parts of Jim’s question, concerning downgrade & cancel options. If you want to avoid the wrath of Amex RAT, a couple things to bear in mind:
- Wait for the annual fee to post, then ask for a retention offer. If you don’t like what you get, decide whether to downgrade or cancel. (Note: the annual fee comes on your account anniversary. That’s easy if it’s a new card, but if you upgraded a card make sure to know the specific date when you changed cards)
- With most banks, you need to take action within 30 days of the annual fee posting. This is the period in which you can get the full fee refunded (if you cancel) or part of it refunded (pro-rated refund if you downgrade). This varies by bank, obviously.
- Doing this once or twice shouldn’t be an issue for you, especially if you are spending on your credit cards like normal and otherwise being a “good customer”.
- Consistently closing every single card at the 1-year mark, having no spend after the bonus period, and other “bad customer” elements are what RAT is looking for (in theory).
Final Thoughts
None of us can say exactly how RAT works. From data and experience, these are our best guesses on how to avoid them shutting down your accounts. If you are using your credit cards like normal to purchase the daily things you need in life, you should be fine. Right now, that’s our best understanding of how they work.
If you want to downgrade, now you know how. Want to cancel? Now you know how. Knowing about RAT and how to avoid their wrath is a good thing, but it’s also possible that they get unneeded attention. Most people should be fine. Use your cards throughout the year and for standard things that every normal person uses a credit card for.
If you have a question, feel free to ask in our Facebook group or email me at Ryan[at]MilesToMemories.com
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I accepted a retention offer recently on a Hilton card but realized after the fact that I may want to close that card since I’m out of Amex slots…I am debating if maybe I should just not meet the spend requirement for the retention offer. Although I wonder if RAT differentiates between someone that accepted a retention offer and never met the spend versus someone that did meet the spend.
HoKo – in the terms that they read you, you basically agreed to keep the card for a year. I get the idea you’re considering, but I don’t think they see it the same way. If it were me, I’d keep the card for a year at this point.
You mention waiting for the annual fee. Don’t forget that if you got the welcome points with a product upgrade (example no AF Amex Everyday to Preferred) the annual fee does NOT mean you’ve had the card a year.
Actually I see that you did mention upgraded cards and remembering when you switched. Must have missed it in first reading.
Just came here and added it due to your comment. Thanks for pointing it out!
You probably won’t get on the RAT radar for cancelling after 1 year, but if you tried applying for another card you may end up in Amex “pop up” jail for a while.
Ron – maybe. There are a ton of factors (and we don’t know all of them) that go into the pop-up matrix.
Clarification question…wait a year after the card opens or after the bonus actually posted to the account?
Evan – 1 year from card opening is when the fee hits and when your ‘requirements’ for keeping the card are fulfilled according to the Amex terms.