3 signs it's time to downgrade your premium travel credit card to an option with no annual fee

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• If you want to stop paying a credit card's annual fee, consider downgrading your card rather than canceling it.
• Downgrading to a different card with no annual fee preserves your average age of accounts, which is an important factor in determining your credit score.
• I used this strategy to downgrade from the Amex EveryDay® Preferred Credit Card from American Express with a $95 annual fee to the Amex EveryDay® Credit Card from American Express with no annual fee.
• If you're looking to cut costs, downgrading premium rewards credit cards like the Platinum Card® from American Express to no-annual-fee options might make sense.
• See Business Insider's list of the best credit cards with no annual fee.

The best premium travel credit cards don't come for free. For example, the Platinum Card® from American Express and the Chase Sapphire Reserve® have $550 annual fees. While these cards can give you hundreds or even thousands of dollars per year in travel rewards and other benefits, not everyone will be able to justify paying for these cards, especially if they can't take advantage of all the perks.

If you're looking to cut down on expenses, you may be considering canceling a premium credit card with a high annual fee. But don't close your credit card to avoid an annual fee unless that's your last option. Instead, your first choice should be to downgrade to another credit card with no annual fee.

Here are three signs it's time for you to downgrade your premium travel credit card.

We're focused here on the rewards and perks that come with each card. These cards won't be worth it if you're paying interest or late fees. When using a credit card, it's important to pay your balance in full each month, make payments on time, and only spend what you can afford to pay.

Your card's annual fee no longer feels worth it

The biggest reason to close or downgrade a credit card is to eliminate an annual fee. If you want to save on annual fees, your first thought may be the close the card. But you shouldn't rush to do that as it can harm your credit score. More on that in the next section.

Between my personal cards, my wife's cards, and my business credit cards, I have nine different credit cards with annual fees that add up to more than $1,000 per year. But those cards give me free flights, hotel nights, rental car insurance, TSA PreCheck and Global Entry for my family, and other benefits.

I don't mind paying for an annual fee if I get at least that value in return each year, but I sometimes find a card is no longer worth it. In that case, downgrading can eliminate the annual fee. I usually give up rewards and benefits, but with a downgrade, I can keep the card open and still save on annual fees.

You want to maintain your credit score

While it makes sense to close old bank and investment accounts you no longer use, you shouldn't rush to close a credit card just because it isn't your main card. Credit cards are a factor in your credit report and credit score. Keeping cards open as long as possible is good for your credit.

A long, positive history with a card helps your credit score in a couple of ways. First, on-time payments are the biggest factor in your credit score. Using a card just occasionally, as long as you pay it on time, still gives you a positive mark on your credit report. Keeping a card also slowly improves your average age of credit, a smaller but still important factor in your credit.

Closing a card has the opposite result. It stops adding to your average age of credit and lowers your total available credit. Lower available credit can hurt your credit utilization, another big factor in your credit.

When you downgrade a card, you can usually keep your account number and all of the benefits of a card with longevity. But you can stop paying that sometimes-expensive annual fee.

You could be earning more rewards where you spend the most

While my household has nine cards with annual fees, we have 20 cards in total. Many of the 11 cards with no annual fee started as cards with an annual fee. By cutting annual fees on cards I don't use as often, I can point those dollars to cards that give me the best value everywhere I use them.

For example, my Amex EveryDay® Credit Card from American Express used to be an Amex EveryDay® Preferred Credit Card with a $95 annual fee. This used to be my main card for daily purchases, but I switched things up to better meet my needs. The EveryDay card has no annual fee and I use it for an occasional purchase to keep the account active.

I use a combination of cards to get the best rewards where I spend most:

• American Express® Gold Card ($250 annual fee) — restaurants and US supermarkets
• Chase Sapphire Reserve ($550 annual fee) — travel
• Chase Freedom® (no annual fee) — rotating categories (currently including grocery stores)
• Ink Business Cash℠ Credit Card (no annual fee) — office supplies and internet
• Chase Freedom Unlimited® (no annual fee) — everything else

While you're spending some extra time at home anyway, it's a perfect opportunity to review your spending habits, downgrade from cards that are no longer ideal, and sign up for the cards that earn bonus rewards on your most common purchases.

Realign your cards with your spending habits

If you've been thinking about making some updates to your wallet, there's no better time than the present. While you may run into longer wait times than usual for customer service, saving hundreds of dollars per year could be worth the wait. Once you've downgraded your old cards to eliminate unnecessary annual fees, you can start focusing on getting the right cards for your current and future needs.

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