Home Credit Cards When Should You Get Rid Of A Discontinued Credit Card?

When Should You Get Rid Of A Discontinued Credit Card?

by joeheg

If you’ve been playing this game for a while, you’ll eventually end up with a credit card that’s no longer available to new applicants. I call these discontinued cards “dinosaurs” and I have a drawer full of them. There are many reasons that banks stop offering a card. Maybe a bank is no longer interested in providing cards to a market segment like Barclays has done several times with their Arrival cards or US Bank just did with their premium Altitude Reserve card.

Most of the time, a card becomes a dinosaur when there’s a major refresh, which involves a shift in the card benefits and usually includes an increase in the annual fee. I’d imagine it’s because banks still have rules they need to adhere to. In a regulatory sense, it’s easier to just introduce a new card instead of converting all of your current cardholders to the new product at the launch.

If you’re a current customer, you’ve already paid a fee for your benefits. To change or remove them involves providing notice to cardholders and continuing the current benefits for a period of time. Most often, it’s a year because by then all the cardholders will have paid a new fee and by doing so, agree to the new terms.

For credit card junkies, this can lead to some lucrative opportunities. If you’re a long term IHG credit card holder, you most likely still have your IHG Select card with a $49 annual fee that gives a free night certificate every year. When IHG introduced the IHG Premier card, it stopped sign-ups for the Select. The Premier card does offer better earning categories but most people just held this card for the free night.

When banks offer a totally new card, it’s typically considered a new product. That means you’re able to earn a sign-up bonus even if you’ve got one for the older version. I know several people who now have both IHG cards, earning two free nights per year. As a bonus, the perks of the two cards stack on top of one another. The older IHG Select provides a 10% rebate on award redemptions while the new IHG Premier offers a fourth award night free perk. If you have both cards, you’ll get the fourth night free on award stays in addition to earning your 10% rebate. Pretty sweet.

By now, you might be thinking “But Joe, you were going to tell us why we SHOULDN’T keep a discontinued card.”

The catalyst for this post was the recent news that Chase and Hyatt will convert all legacy Hyatt card members to the World of Hyatt Visa. Unlike the situation I described above, it was not possible to have both Hyatt credit cards. Chase made sure of this in the signup language on the World of Hyatt card.

The product is not available to either (i) current Cardmembers of any Hyatt Credit Card, or (ii) previous Cardmembers of any Hyatt Credit Card who received a new Cardmember bonus within the last 24 months.

So if you had the legacy Hyatt card or received a sign-up bonus within 24 months, you couldn’t sign up for the World of Hyatt card. That was, until June 2020, two years after the launch of the new card. If you had signed up right before the old card was discontinued, which many people did, you’re now within the window to cancel and then sign up for the new card.

Anyone else thinks it’s a little curious as to why Chase and Hyatt waited until after two years to transition all legacy Hyatt cards to the World of Hyatt card?

In fairness, the World of Hyatt card is a better card if you’re a Hyatt loyalist. Both cards give automatic Discoverist status but the World of Hyatt gives you 5 elite night credits every year and the ability to earn extra elite night credits with spending on the card. You’ll also get a free night certificate good at a category 1-4 hotel with both cards, but you can earn an additional certificate by spending $15,000 on the World of Hyatt card in a year.

The legacy Hyatt card has an annual fee of $75 while the World of Hyatt card charges $95 a year.

This raises the question. If you were keeping the legacy Hyatt card, why hadn’t you upgraded by now? I’m sure there were a set of customers who only kept the card for the free night every year. Paying $75 for a free night is cheaper than paying $95 for the same free night. For some, like me, I don’t care about earning Hyatt status by spending on a credit card.

When it comes down to it, under normal circumstances you’re going to easily be able to make your money back on a Hyatt category 1-4 free night for either $75 or $95.

For an everyday user, I’m not sure there’s much more benefit from the card for the extra $20. But it’s not also enough of an increase to make people reconsider the value of the card. Current legacy Hyatt cardholders who are converted to the World of Hyatt card will not be charged the higher annual fee until August 2021. People will be able to take advantage of the new benefits for 8 months before any of them will have to pay the extra $20. I wonder if by then Chase and Hyatt are betting that people will be traveling more, or at least looking at travel plans and a way to spend that free night certificate.

If you were keeping the Hyatt card just for the free night, you’ve made out by paying $20 less for almost three years. If you’re a Hyatt fan, you’ve probably taken advantage of one of the upgrade offers Chase kept sending out to legacy cardholders. When it comes down to if you should have gotten rid of the older card by now, Your Mileage May Vary.

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This post first appeared on Your Mileage May Vary

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