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Your credit card updated its rewards rate – here’s what to do next

Evolving rewards and benefits could be a sign it's time to change up your card strategy


Credit card benefits and terms are constantly shifting, but a change to your rewards rate can change if the card is still a good choice for you. Luckily, you have several options when this happens.

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Last month, the Blue Cash Preferred® Card from American Express underwent several changes, including an overhaul of the card’s rewards rate. Cardholders lost a bonus category on U.S. department store purchases but gained a good rate of cash back on both transit and select U.S. streaming subscriptions.

For most cardholders, these updates probably didn’t affect the card’s potential value – and might have even made it more lucrative. But for users who chose the Blue Cash Preferred for a good rate of cash back at U.S. department stores, the card might no longer make sense for their needs.

Credit card rewards and benefits are constantly shifting, and you might sign up for a card based on its earning rate only for it to change a few months down the line. So what do you do if your credit card rewards change?

First, you should constantly evaluate whether or not your rewards card is still a good choice for you. As card terms are updated, the best deal for your spending one month might not be the next. If you find yourself carrying a card that no longer matches your spending patterns, there are several different steps you can take to address the problem.

Reevaluate if the card is still good for your lifestyle

Anytime your credit card changes its rewards rate, you should compare the new rate to your budget to make sure you can still earn a good amount of points or cash back. Your card’s bonus categories should align with your spending to make it worthwhile – especially if you are paying an annual fee.

In many cases, updates to a card’s earning rate might actually make it more lucrative. In the case of the Blue Cash Preferred card, the updated offer still includes a generous rate on U.S. supermarket purchases and U.S. gas station purchases, but it also expands cash back opportunities to all transit – which might equal more cash back potential for some spenders. In that case, you’ll probably want to hang onto the card and start using it for a wider range of purchases.

However, cardholders who chose the Blue Cash Preferred for its rate on U.S. department store purchases might be looking for other options.

What to do if your credit card no longer makes sense for you

If you’ve evaluated your card’s new terms and determined that it is no longer a good choice for your spending, you have a few different options – each with their own pros and cons.

1. Keep the card open, but shift your spending to another card

If your card no longer makes sense for you, it might be time to consider applying for another card that better aligns with your spending patterns. You can keep your original card open to boost your available credit – but shift the majority of your spending to a card that offers more potential rewards.

Pros: You won’t suffer the negative affect on your credit score that comes with closing a credit card, and you can add a new card to your rotation that offers better opportunities for points or cash back.

Cons: Depending on your current credit score and application history, you might not be ready to apply for another credit card and add a new account.

2. Upgrade or downgrade to another card with the same issuer

Another option is to upgrade or downgrade the card to another product with the same issuer. By calling the customer service number on the back of your card, you might be eligible to switch to a new product while maintaining your account history. This means that you can find another card with a more relevant rewards rate, extensive benefits or a lower annual fee without having to apply for a new card and suffer a ding to your credit.

For example, imagine you had the Blue Cash Preferred card to earn a good rate on U.S. department store purchases, but the recent change to the card’s rewards rate means it doesn’t offer as much value for your spending. If you call American Express, you might be able to downgrade the card to the Blue Cash Everyday® Card from American Express, which still offers a bonus category at select U.S. department stores and doesn’t charge an annual fee. That way, you aren’t stuck paying $95 a year for the Blue Cash Preferred when it doesn’t earn rewards aligned with your spending habits. Plus, you now have a card that does meet those needs – all without opening a new account.

Pros: You’ll have a credit card that is more aligned with your spending without having to open a new account.

Cons: Every card issuer has different eligibility requirements and restrictions before you can shift to a new product – such as the amount of time your account has already been open and which cards you can switch between. You’ll need to meet these rules before you can qualify for a product change.

3. Close your credit card

For most people, closing the credit card is probably not the best option – even if the rewards program no longer makes sense for your needs. Keeping the account open benefits your credit score – as it contributes to your available credit and average age of open accounts.

See Related: Why closing a credit card can damage your credit

However, if you cannot downgrade the card to a no annual fee option and need to save the money –  or if you don’t want the temptation of a credit limit you aren’t utilizing – closing your card is still an option.

See Related: How to cancel a credit card

Just make sure follow important steps such as redeeming any rewards you have left and paying off your balance in full before closing your card.

Pros: You will no longer be carrying card you don’t have use for anymore.

Cons: You might suffer a hit to your credit score by reducing your available credit and age of accounts.

Keep an eye out for other changes to your credit card

Beyond rewards rates, credit card terms and benefits change often. Don’t forget to watch out for changes to your APR or fees, reduction of benefits or new features that might change if the card is a good match for you.

See Related: Terms and benefits checkup: Assess your credit card’s value

Bottom line

We recommend you regularly reevaluate whether or not your credit card is working with your spending habits – as rewards and benefits can change. If your credit card updates its rewards rate to one that no longer earns you significant points or cash back, it might be time to consider adding a new credit card to your rotation, upgrading or downgrading the card or even closing the account.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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