Pro tip: Product Changes

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If you have my Kindle ebook (The Free-quent Flyer's Manifesto), follow the travel blogosphere, or visit forums like FlyerTalk or Milepoint, then you know that travel hackers spend a lot of time thinking about their applications for new credit cards, maximizing the number of miles and points we earn for each "hard" credit pull, which in the short term reduce an applicant's credit score.

But one easy, free, and potentially lucrative technique gets a lot less publicity (presumably because bloggers don't receive affiliate income for promoting it): the product change. Just yesterday I did my third product change in 12 months, and realized I should draw my readers' attention to these opportunities. 

What is it?

A "product change" is the term for changing a credit card account from one product offered by a bank to another product offered by the same bank. A product change differs from an application for new credit in several ways. They:

  • do not require an additional credit check;
  • can maintain your account's history;
  • do not earn a signup bonus (except - occasionally - for product upgrades) 

As I'll discuss below, product changes are best for cards that have low signup bonuses, which aren't worth wasting a "hard" credit inquiry on. 

Why change products?

It's helpful to think of product changes in three conceptual categories: downgrades to no-annual-fee cards; changes to totally different product lines; and product upgrades.

  1. Downgrades. Perhaps the most common type of product change is from a product that charges an annual fee to one that does not. For example, say you've decided to apply for the Chase Ink Bold card, and you already carry a Chase Sapphire Preferred. The annual fee is $95 for both cards, but you only need one card that earns flexible Ultimate Rewards points in order to make all your Ultimate Rewards points flexible. Instead of canceling your Sapphire Preferred card, you can downgrade it to a no-annual-fee Sapphire card (or a Freedom card). That way, you'll keep the account's history and credit line intact (although you'll lose the valuable double earning rate on travel purchases with the Sapphire Preferred).
  2. Product line changes. This is the category my product changes tend to fall into. About a year ago, I noticed that the Bankamericard Cash Rewards card offered 3% cash back at gas stations on up to $1,500 in purchases per calendar quarter. The signup bonus, however, was only $100: not nearly enough to waste a credit inquiry on. Then I realized that I still had an old Bank of America WorldPerks card that earned nearly worthless WorldPoints, so I called Bank of America and asked for a product change to the Cash Rewards card – they immediately agreed. Likewise, a few months later I was considering applying for the Chase Freedom card, which offered just 10,000 Ultimate Rewards points. Instead, I called Chase and asked for a product change from an old Chase Slate card I still carried. Finally, just yesterday I noticed that the annual fee on my second US Bank FlexPerks Travel Rewards card was about to come due (I applied for a second card during the hyper-valuable Olympic Games promotion last summer). Instead of canceling the card, I called US Bank and asked for a product change to the US Bank Cash+ card. Instead of canceling 1 card and having 2 additional credit inquiries, product changes allowed me to keep my credit lines and credit history, while still giving me access to lucrative new earning opportunities.
  3. Upgrades. The final category of product changes is product upgrades, which usually applies to cards issued by American Express, although it can apply equally to any bank's credit cards. For example, there's a long-standing offer of 50,000 Hilton HHonors points to upgrade from the no-fee American Express Hilton HHonors card to the Hilton Surpass card (just login to your American Express account and click here to see if you're eligible). Likewise, if you have an American Express Gold Delta personal card, then you're not eligible for a signup bonus for the Platinum Delta personal card. But if you can't wait to start earning Medallion Qualification Miles by reaching $25,000 and $50,000 in calendar year purchases with the Platinum card, you can still request a product change from the Gold Delta card (though you'll usually be better off waiting until you're eligible for a new Platinum account, since it occasionally offers truly massive signup bonuses).

What can go wrong?

A product change is typically a pretty straightforward process, but there are a few simple things to keep in mind. Always clearly identify the card you're changing from and changing to: I have two FlexPerks Travel Rewards cards, so I made sure the US Bank representative knew which card I was talking about by giving her the last 4 digits of the card number. Always make sure the representative knows you're asking for a product change, and not asking to apply for a new card. It never hurts to ask the representative to confirm that there won't be an additional credit check – they shouldn't have a reason to ask for your Social Security number, so if they do, that's a red flag that you're having a miscommunication.

Finally, thanks to some new consumer protection regulations in the recent financial reform law, some credit card companies will refuse to do product changes for the first 12 months your account is open. This regulation is interpreted differently by different card issuers, so your results may vary depending on how long you've held a card and which bank issues it.

Happy hacking!