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Will I Lose My Miles or Points If I Cancel My Credit Card?

April 10, 2014
Credit Cards
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One of the more common questions cardholders have is whether cancelling a credit card that is linked to your rewards program will result in you losing the points you’ve racked up.

The answer is that it is different for every program. As always, the best thing to do before even applying for a card you are considering is to call customer service for a definitive reply.

Before you cancel

I first came across this issue when I was considering cancelling a certain airline reward credit card I’d had for some time (now no longer offered). I really didn’t use it, or the airline, very much anymore and wanted to save the annual fee. I had enough miles for a free trip on the airline and expected it would be my last with them.

I checked the terms and conditions and, much to my surprise, it said that any miles I had in my airline account that had been earned with the card would vanish if I cancelled the card.

Whoa! I called customer service to confirm, which they did. Ouch. So I waited until I redeemed the points and took my flight before cancelling the card.

A sample of the fine print

American Express Membership Rewards has the following policy, current in spring 2014:

  1. If for any reason we cancel any Linked Account (including because of your death, bankruptcy or insolvency), any points accrued in your program account will be forfeited. If we reinstate the Linked Account(s) within one year of cancellation, any points accrued in your program account may be converted into a participating Frequent Customer program or redeemed for a reward, provided all other conditions set forth herein have been met.
  2. If you voluntarily cancel enrollment in the program or cancel all Linked Accounts enrolled in the program but keep at least one AMEX Card open and in good standing, you will have up to 30 days from date of cancellation to redeem the points accrued in the program account.
  3. If you cancel a Linked Account and cancel all Cards that are issued by AMEX or its affiliates, all points accrued in the program account will be forfeited immediately.

As of this writing, both Chase Ultimate Rewards and Citi Thank You Points are like my old airline card. If you cancel the account, you lose the points, period. Chase makes it clear: “Any points accrued shall be permanently forfeited if your Account has been closed, or upon the Cardholder’s death.”

Citibank’s policy is: “If the Account is closed for any reason, you will no longer receive any ThankYou Points from Citibank and you will have sixty (60) calendar days from the date the Account is closed to redeem any accumulated ThankYou Points received from Citibank from your ThankYou Member Account. After this time, unredeemed ThankYou Points associated with the Account will be forfeited and the ThankYou Member Account may be closed.”

How to protect your rewards

Is there a way around this? Yes. If you plan to cancel your credit card account, either redeem these points or transfer them to a different program before you cancel.

Airplane image via Shutterstock