Do you keep your points and miles when you cancel a credit card?

Travel credit cards have become increasingly popular over the years, offering consumers the opportunity to earn points and miles that can be redeemed for travel rewards. Whether it’s a free flight, a luxurious hotel stay, or even cash back, there are a variety of benefits that come with using a travel credit card strategically.

However, when it comes to canceling a credit card, there are often misconceptions about what will happen to the rewards you’ve earned. It’s important to understand the different types of rewards and how they are affected when you close a credit card account. In this article, we will debunk some of the most popular myths surrounding credit card rewards and provide you with the information you need to make an informed decision.

Types of Credit Card Rewards

Credit card rewards can generally be divided into two categories: airline miles and hotel points, and rewards within an issuer’s proprietary program. Airline miles and hotel points are typically transferred to your loyalty program account within a week of your statement closing, making it difficult for the card issuer to take them back if you cancel the card. On the other hand, rewards within an issuer’s proprietary program are owned and controlled by the issuing bank, which means you may forfeit your points if you cancel the card.

What Happens to Your Points and Miles When You Cancel a Credit Card?

For the most part, you will not lose your points and miles when you cancel cards that fall into the first category of airline miles and hotel points. These rewards are usually safe in your loyalty program account and will not be taken back by the card issuer. However, if you cancel a card that earns rewards within an issuer’s proprietary program, you may risk forfeiting your points.

Exceptions to the Rule

One exception to the rule is New York state law, which requires credit card issuers to provide a 45-day notice to cardholders when a credit card account or rewards program is canceled, closed, or modified in a less favorable way. Consumers have a 90-day grace period to redeem their accrued points or rewards after their account has been closed.

Policies by Issuer

Each credit card issuer has its own policies regarding the forfeiture of points and miles when a card is canceled. For example, American Express Membership Rewards points are immediately forfeited when you cancel a card, while Capital One miles can be moved to another cardholder before canceling the card. Chase Ultimate Rewards points are forfeited when your account is closed but can be transferred to another account before closure. Citi ThankYou points are forfeited 90 days after you cancel a card if you don’t have another card that earns ThankYou points associated with your account.

Bottom Line

Canceling a credit card may be necessary to avoid an annual fee or if you no longer use the card. However, it’s important to understand how canceling a card will affect the points and miles you’ve earned on that card. While most airline- and hotel-specific cards won’t take back the points that have already posted to your account, many cards affiliated with a specific issuer may forfeit your points. It’s essential to redeem your points before canceling or explore other strategies to keep them in your possession.

In conclusion, understanding the policies and regulations surrounding credit card rewards can help you make informed decisions when it comes to canceling a credit card. By knowing your options and the potential consequences, you can ensure that you don’t lose the valuable rewards you’ve worked hard to earn.

Leave a Reply

Your email address will not be published. Required fields are marked *