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Does downgrading a credit card, from a premium card that has an associated annual fee to one without an annual fee with the same bank, impact the credit history?
Assume that the credit line remains the same. I am looking to downgrade my oldest credit card (8 years old) and am concerned that it may impact the average age of my credit history.
It depends. If the issuer keeps the "issued" date the same, no impact. If it resets, you will lose the time that card gave you.
I have seen card's issue date get reset when the same company needed to send a new card due to a store hack. And I thought "really?" My FICO gets dinged because average age dropped when I did nothing at all on my end? More recently, Costco dropped Amex as their preferred card and went to a Citibank Visa. The Visa retained my original date. I was amazed at this.
So, from my own strange experiences, it can go either way. This points towards the benefit of having multiple accounts and building an aging credit file.
FICO likes to see over 9 years for the average age. Over time, I've been careful not to get new cards or cancel old ones too quickly. At close to 10 years, a dropped card or age-reset will not drop me below that 9 year level. And the recent card I picked up also didn't pull the age down more than a couple months.
It depends on the bank. Almost all major banks that I have used (Chase, AMEX, Citi) simply downgrade the card, and it doesn't look any different as far as your credit report is concerned. The tradeline itself is unaffected. Wells Fargo, as of this writing, closes the entire account and opens an entirely new line of credit when I downgraded one of my cards. So be sure to confirm with the customer service rep if you don't want this to happen.
