Can I lose my credit card rewards points?
Credit card rewards offer an extra incentive to spend. You can earn points on your purchases and redeem them for merchandise, airline miles, or cashback, depending on your issuer’s rewards program.
These perks may seem generous, but points can take a long time to accumulate. This is especially true as not all purchases on your credit card will fall within the reward categories. Here are several reasons why your issuer may revoke them.
A penalty for late or missed payments
Late and missed credit card repayments incur several penalties. These include fees, higher interest rates, and potential damage to your credit score. If you fall seriously behind with repayments, you can also forfeit your rewards points.
Some issuers allow you to get your points back by paying the outstanding balance, plus a fee. You may also have to request that the issuer reinstates your points online or by phone. Even if you bring your account bank into good standing, there is no guarantee your issuer will return your rewards points.
Inactivity on your credit account
Your rewards points could be at risk if you’re not spending on your credit card. Issuers can revoke points from inactive accounts and potentially close them altogether.
Some issuers do offer a grace period, allowing you to use your points between 30-90 days after closure. To check if your points will still be available following inactivity, refer to the terms and conditions of the rewards program. You can avoid letting your card languish by making a transaction every three months or so.
You close your credit account
Closing your account can lead to the loss of your rewards. Always check the balance of your points before you cancel a credit card. You may be able to redeem them, exchange lower amounts through gift cards, or transfer your points to another credit account.
Your issuer can also rescind any rewards you earned through a sign-up bonus if you close your account too early. Refer to the terms and conditions of the introductory offer to see how long your account needs to remain open.
You file for bankruptcy
Customers facing financial difficulties will likely have already lost their points through late or missed payments. Even if your account is in credit and you don’t include that credit card in your bankruptcy claim, issuers will still revoke your rewards points when you file for bankruptcy.
You get a refund on items
To stop customers abusing reward programs, issuers will take away any rewards points earned on items the merchant refunds to the credit card. The cost of returned items will also be deducted from any spending incentives you have. If you don’t want to keep a purchase, don’t let the prospect of losing points put you off from returning it.
Violation of the reward program terms
Issuers take the violation of the rewards program terms seriously. If they find you are trying to sell or buy points, this can result in lost rewards and the closure of your credit account. Trying to get around the rules creatively is unlikely to work in your favor. Card issuers are cracking down on credit card churning, which is a method where customers register for multiple new credit cards to redeem bonuses before closing the account.
Expiration of rewards points
Most issuers will let you keep your points for as long as your card is active, but some will expire them after a set period. They may not warn you that your points are due to expire either, so always check the terms of the rewards program and make a record of expiration dates.
If your points are due to expire and you don’t have any use for them, you could request a statement credit to your account instead. You may find that your points are less valuable if you redeem them in this way, but it is preferable to losing them entirely.
A change in terms and conditions
The fine print of most credit agreements will state that the issuer can change their rewards program at any time. If they do, your issuer will likely give you notice and a set period to use your points. Act immediately, so your rewards don’t go to waste.