You Do NOT Risk Losing Your Points When You Cancel a Credit Card

It struck me that on the same day both The Points Guy and Million Mile Secrets wrote about whether you can lose your points earned via a credit card when you cancel the card.

I gave a pretty comprehensive answer to this question about 20 months ago.

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.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. You are right – but the issue of bank points vanishing on cancellation is one newbies need to understand.

    You could lose all your UR or MR points if you called to cancel and didn’t think to transfer out.

  2. True. But be aware that if Chase closes your cards down (which they sometimes do for strange reasons) they confiscate all Ultimate Rewards points you have. Too many people keep their UR points in Chase too long.

    AmEx gives you a few days to transfer points out when they financial audit or close an account.

  3. Second Greg. For the amateurs in your audience (such as myself) the majority of our earning is through more lucrative and flexible bank points and those accounts DO disappear when you cancel the last card attached to the account.

    So I think it’s no longer true, for most people, that you don’t risk losing points when you cancel a card — if your points remain in the bank program you do, indeed, risk losing them.

  4. What if I buy a refundable ticket that I don’t intend to use just to reach the minimum spending required on a card I plan to keep?

    What would be my chances of losing those points?

  5. The title of the post is misleading for naïve readers. True, you do not risk losing airline miles or hotel points if you cancel a card.

    But in many cases you will lose Bank Points if you cancel that type of card. And if you even just downgrade some cards, such as Chase Sapphire, to a no fee version, you will lose the ability to transfer those points to airline programs unless you have another major Chase card.

    Better to have gone with a question, such as “Do you risk losing your points if you cancel a credit card”? With the title above, someone may read it, decide they were just given the answer, and not bother to read the whole thing. Then when they cancel their only AMEX card, and the points disappear… 🙁

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