Are Reward Points Still Valid if I Cancel a Credit Card?
Switching up your credit card can be a smart financial decision, but it’s important to consider the fate of accumulated reward points if you cancel your current card. Whether you have a strongly branded credit card or a generic rewards card issued by a bank, the answer to whether reward points are still valid upon card cancellation can vary based on the terms and conditions of the card.
Understanding the Potential Outcomes
Let's explore a few scenarios:
Transferring Points with Non-Branded Rewards Cards
Imagine you own a Chase Freedom Visa Credit Card, for example. If you successfully transfer your Ultimate Rewards points to an airline, such as United Airlines, and subsequently cancel your card, your points remain on your United Airlines account. This means you'll still benefit from those points, even though you no longer have the card.
Points with Branded Credit Cards
Consider a JetBlue Card, which is a branded credit card tied directly to an airline. In the event you cancel your card, the points earned through the JetBlue TrueBlue program will remain in your account with JetBlue. The airline’s points do not get transferred based on the card used; instead, they stay in the airline’s affiliated account.
Citi-Branded Credit Card Points
For Citi-branded credit cards, points are often associated with the specific brands, like American Airlines—similar to the connection with JetBlue. For instance, if you have Citi Thankyou Points from the American Airlines card, these points are stored in your American Airlines account. Even if you cancel the card, these points will remain in the airline's system and can be used accordingly.
Key Considerations
Before canceling a credit card, it's crucial to understand how the card's points system operates:
Branded Credit Cards: Points generally stay in the brand's account, regardless of the card. If points are stored in an airline’s account, they remain with the airline even if you cancel the card. Non-Branded Credit Cards: Points might be transferable to a third-party account, so transferring them could be a smart strategy before canceling the card. Transferring Points: Ensure that you transfer or use all your points before canceling the card. Using or transferring points can prevent them from being lost.What to Do During the Transition
When transitioning to a new credit card:
Review the terms and conditions of your credit card to understand how your reward points are stored and managed. Check if there are any specific rules regarding cancelling the card and its impact on your points. Transfer or use your points before cancelling your old card to avoid any potential losses. Ensure any point transfers are finalized before the cancellation date.Additional Tips
As you navigate the process of switching your credit card and managing your reward points:
Contact Your Credit Card Issuer: Always check with your credit card issuer about your reward points policies if you're unsure. Stay Organized: Keep track of when your reward points expire, and manage them accordingly. Consider Future Needs: Choose a new credit card that aligns with your travel or purchase habits to continue benefiting from rewards.Whether you're switching from a non-branded rewards card to a branded credit card, or vice versa, always pay attention to the fine print regarding reward points. This simple step can save you a lot of trouble and ensure that you retain the value of your points.
Key Takeaways: Reward points from branded credit cards often stay in the brand's account, even if the card is cancelled. Non-branded credit card points can often be transferred to third-party accounts. Always check and understand the terms and conditions of your credit card regarding reward points.
By following these guidelines, you can ensure that your reward points are thoroughly managed, and you get the most out of your credit card rewards regardless of the card you are using.