Credit card rewards can be a lucrative way to earn an incentive for your everyday spending. There are several different kinds of credit card rewards – you might earn airline miles, hotel points, credit card points, or just straight cash back. When you decide to cancel a credit card, you’ll want to make sure that you don’t lose any miles, points, or rewards that you’ve earned while having the card. It’s important to know when you are at risk of losing your rewards, and what you can do to not lose your points when you cancel a credit card.
Reasons To Cancel a Credit Card
There are a variety of different reasons to cancel a credit card. You may find that you are no longer using this particular card. This could be due to having other cards that you use more or perhaps due to a change in your travel patterns. Another reason to cancel a credit card might be because you no longer find paying the annual fee to be worth the benefits that you are receiving.
Consider a Call To The Retention Department
Before canceling your credit card, it may be worth a call to your bank or credit card company. Most banks have a retention department whose job is to try and keep customers. You can usually access the retention department by calling the main number for your card. Once you are talking to a person, you can either ask for the retention department or just say you are wanting to close your account.
In many cases, banks might give you a retention offer. This may be in the form of additional miles or points, or a spending offer where you will get extra miles and points for spending over the next several months. Another possibility is that you may be offered a statement credit to help offset the annual fee. Once you see what offers are available, you can decide if any of them persuade you to keep the card.
Downgrading your card is another option instead of canceling the card. Many credit card issuers have no-fee options for many of their card families. One example of this would be downgrading your Chase Sapphire Preferred card to a no-fee Chase Freedom card.
Will You Lose Your Airline Miles or Hotel Points When You Cancel a Card?
If you do decide to cancel your card, there are two different types of cards, and the rules on whether or not you will lose your points depend on which type of card we’re talking about. The first type of card that we’ll talk about is an airline or hotel co-branded card. Examples of these types of cards would be the Citi American Airlines AAdvantage card or the American Express Hilton Honors card.
If you have an airline or hotel credit card, then your points will be safe in your airline or hotel loyalty account. As an example, any Hilton Honors points are sent from American Express to Hilton with each monthly statement. If you call American Express to cancel your card, American Express does not claw your points back from Hilton. The same thing applies to an airline card. In that case, your airline miles would be safe in your airline frequent flyer account.
Will You Lose Your Bank or Credit Card Points When You Cancel a Card?
The other type of card is one that earns points that are specific to a bank or credit card company. Examples of these would be a Chase Freedom card which earns Chase Ultimate Rewards or an American Express Platinum card that earns American Express Membership Rewards points. Because the rewards that you earn with these types of cards are specific to the bank that holds your credit cards, in many cases, you WILL lose your points if you cancel your card.
How to Not Lose Your Points When You Cancel a Credit Card
Having said that, there are a few ways not to lose your points when you cancel a credit card, even if it’s one that earns bank or credit card points. The easiest way is to just spend all of your points before you cancel the card. If your credit card company offers hotel or airline transfer partners, you can also transfer your points to your hotel or airline loyalty account. Then if you can cancel your card, you won’t lose your hard-earned rewards.
If neither of those options works for you, you may still be able to keep your points even if you cancel your credit card. Here are the policies for a few of the major bank-specific currencies:
- American Express Membership Rewards – American Express has only one Membership Rewards account per person, regardless of how many different American Express cards you might have. As long as you have at least ONE Amex card open, you can cancel any of the other ones and not lose your Membership Rewards
- Chase Ultimate Rewards – Unlike Amex, Chase has separate Ultimate Rewards accounts for each card you have. But you can transfer points between your different accounts for free at any time. So just make sure that you transfer your points to an existing card or spend them before canceling your card
- Citi ThankYou points – Citi does let you transfer your ThankYou points, but transferred points expire after 90 days. So make sure to spend or transfer your points before then
- Bank of America Cash Rewards – your Bank of America Cash Rewards points will be lost when you cancel your card. So make sure you redeem your points as a statement credit before canceling.
Hopefully, these tips will help you make sure not to lose your points when you cancel a credit card!