We talk about travel credit cards quite a bit here at TPG. By applying for and using these cards strategically, you can unlock incredible travel experiences, like top flight flights or luxury hotel rooms.
However, there are a number of misconceptions when it comes to credit cards, so it’s important to separate fact from fiction and debunk some of the most popular myths.
Here’s what you need to know if you’re considering canceling a credit card but aren’t sure what will happen to the rewards you’ve earned from it.
Points and Miles: Quick Breakdown
You may assume that a credit card issuer is just like a bank. You would never expect Chase or Bank of America to simply keep your money if you close a checking or savings account. Surely the same logic applies to credit card rewards, right?
Unfortunately, the answer to this question is “not necessarily.”
In general, you can divide your credit card rewards into two categories:
Let’s see how easy it is to snag each of these types of rewards.
Do you keep your points and miles if you cancel a credit card?
For the most part, you won’t lose your points and miles if you cancel cards that fall into the first category of airline miles and hotel points, as they are typically credited to your loyalty program account within about a week of closing your statement.
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Once they’re there, it becomes incredibly difficult for the card issuer to take them back if you cancel the card.
Related: What to do before closing a credit card
However, canceling a tier two card, which earns rewards within the issuer’s own program, may result in the loss of your points. That’s because these accounts (and their contents) are owned and controlled by the issuing bank.
Exception: New York State Law
One exception to the above: If you live in New York State, you now have a certain grace period if you try to redeem rewards on a canceled card.
As of December 2023, New York law provides that “credit card issuers have 45 days to notify cardholders when an existing credit card account or rewards program is canceled or closed or changed in a manner that is less favorable to the consumer.”
Additionally, “consumers have 90 days to redeem their accumulated points or rewards.” In other words, you will receive a 90-day grace period after your account is closed during which you can redeem any points or miles.
Points and miles policy per issuer
Here are some policies to keep in mind, depending on the publisher:
American Express Membership Rewards
Policy: Membership Rewards points are immediately lost if you cancel a card and do not have another card earning Membership Rewards points associated with that account.
Exceptions/workarounds: Under the program terms and conditions, you have a 30-day grace period during which you can redeem your Membership Rewards points if you have at least one other (non-Membership Rewards) American Express card. However, if you cancel your only Amex card, your points will be lost immediately.
Capital One mile
Policy: When you close your account, you will lose any rewards you have not redeemed.
Exceptions/workarounds: Capital One offers tremendous flexibility when it comes to moving your rewards before canceling a card. If you have another card in your account that earns Capital One Miles, you can log in and select the “Move Rewards” option on the rewards page.
You can also transfer your miles to another Capital One cardholder, who doesn’t even have to live at the same address. You must call for this, because you cannot do this online.
Chase ultimate rewards
Policy: Ultimate Rewards points are lost when your account is closed, although the terms and conditions state that you have at least 30 days from the closing date to redeem the points, if your account is in good standing at that time.
Exceptions/workarounds: If you, a spouse/domestic partner, or business owner (for Ink business cards) have another card that can earn Ultimate Rewards points, you can transfer your points to their Ultimate in addition to the 30-day grace period Rewards account before closing your account own.
This is also a great way to convert cashback points into full Ultimate Rewards points. Please note that you may need to call to achieve this.
Citi ThankYou Rewards
Policy: Citi ThankYou points expire 90 days after you cancel a card if you don’t have another card earning ThankYou points linked to your ThankYou Rewards account.
Exceptions/workarounds: If you combine your rewards with those from another account that remains open, you can redeem or transfer them to one of the program’s airline or hotel partners. If you do not have another Citi ThankYou account open at the time your account is closed, you will lose your points after 90 days.
ThankYou Rewards also allows you to share points with a friend or family member who is also a ThankYou member. However, you are limited to 100,000 points per calendar year and all shared points must be redeemed within 90 days.
In short
Canceling a credit card may be worth it to avoid annual fees if you no longer use the card, but it’s essential to know how it will affect the points or miles you’ve earned (but haven’t) on that card redeemed). While most airline- and hotel-specific cards won’t take back points already credited to your account, many cards affiliated with a specific issuer won’t be so forgiving.
Redeeming these points before canceling them is your best bet, but you also have a few additional strategies for keeping them in your possession or sharing them with other cardholders.
