This is something that a lot of program members get confused about, largely because the banks themselves have offered confusing information.
Under almost all circumstances you will not lose airline or hotel points earned through a credit card when you cancel the card. That includes both signup bonuses and points from spending on the card.
Card companies will often tell you otherwise when you call to cancel. Ignore them.
- It’s true that points can expire in many programs, or accounts turned inactive where you forfeit your points, when you don’t earn or redeem points in an account for a period of time (that can vary from 12 to 18 to 24 or 36 months). And using a co-brand credit card is one way to keep an account active. But you don’t need to keep the card to keep your account active, and you don’t forfeit already-earned points if you cancel.
- Points in bank programs – like Chase Ultimate Rewards, American Express Membership Rewards, citi Thank You Points – should be transferred out prior to cancelling. If you don’t have a Membership Rewards account via an open credit card, you don’t have points.
- Points earned on a statement that haven’t closed yet could be lost. That’s usually pretty minor.
There have occasionally been unconfirmed reports of points from signup bonuses being clawed back when customers have cancelled card accounts shortly after opening and receiving bonuses. Those reports are few and far between and some accounts do contain terms and conditions that would allow a bank to do this. To be super safe I wouldn’t cancel a card within 6 months of signing up for it.
The Points Guy offers a scary scenario that I don’t think most folks need to worry much about:
Suppose you spend $3,000 in three months and earn a large bonus, and six months down the line you get a credit. I believe that if you acted in good faith, your card issuer would not take back your bonus, at least not automatically (though they might take away the points you earned from your spending on the purchase in question).
That being said, within the rules of each program, card issuers absolutely have the ability and authority to claw back points, in which case you’d need to convince them that you weren’t trying to be tricky.
Sure, if you generate spending by buying a refundable airline ticket… earn the card’s bonus… then cancel the card and get a refund by check for the ticket you could draw the ire of the bank. But except in this extreme scenario I wouldn’t much worry about having bonus points clawed back.
That said, I’ve heard stories of members having their frequent flyer account audited for generating miles by buying refundable tickets and cancelling. That’s been done on the airline side, either for taking up flight inventory that the member never intended to use, or bey generating AAdvantage miles just before the program stopped counting miles from all sources towards lifetime status.
That’s such a corner case as to not be relevant to nearly all readers.
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