Do you lose points and miles if you cancel a credit card?

Generally speaking, what happens to your credit card rewards when you close your account depends on the type of card you have and the specific rules outlined by its associated rewards program. With this in mind, you should read over your credit card program’s fine print before you take steps to close a credit card account that has a rewards balance.

That said, there are some general rules of thumb to keep in mind if your goal is keeping your points balance alive. There are also steps you can take to avoid losing the points and miles you worked so hard to earn.

Curious what happens to your points and miles if you ditch your credit card? Read on to learn what to expect and how to avoid accidentally forfeiting your rewards points.

What happens to points and miles if you cancel a credit card?

Canceling a credit card without having a plan for your rewards can be a big mistake. After all, most rewards cards with their own programs state that your points are valid only while your account is open. If you close your account without using them, you’ll almost always forfeit them.

When it comes to flexible rewards credit cards, ones usually issued by banks with their own specific programs (for example, Chase Ultimate Rewards cards, Amex Membership Rewards cards, Capital One miles cards, etc.), you typically have two options when it comes to keeping your points if you close a card — you can use them before you cancel or have another card within the same program that will keep them “alive.”

Generally speaking, redeeming your rewards is the smartest way to avoid losing them when you’re ready to cancel a credit card. If you’re unsure of how to redeem them, cards that offer cash back, statement credits and gift cards make things easier. After all, practically anyone can benefit from getting cash back or having a few gift cards to use at their favorite retailers or restaurants. Even if redeeming for cash or gift cards lowers the value of your rewards, it’s still better to receive something than lose out on them entirely.

How having another card in the same family can help

Sometimes having another card in the same family can help you if you don’t want to redeem your rewards. For example, let’s say you have the Chase Sapphire Reserve card and a stash of 60,000 Chase Ultimate Rewards points, but you don’t want to pay the annual fee on this card for another year.

At this point, you could redeem your rewards for cash back, statement credits, gift cards or travel through the Chase portal before closing your account. You could also transfer your Chase points to one of the Chase airline and hotel partners at a 1:1 ratio before closing your card.

If you also have the Chase Freedom Unlimited, however, you can close your Chase Sapphire Reserve card without losing all your points. Chase in particular stores your Ultimate Rewards points according to the card that earned them. Let’s say your Freedom Unlimited has 3,000 points and your Sapphire Reserve has 10,000. To keep your 10,000 points from disappearing, you have to transfer them to your Freedom Unlimited card, even if you’re the primary cardholder of both cards.

That said, with just the Freedom Unlimited, you’ll lose the ability to transfer your points to airline and hotel partners, and you’ll no longer get 50 percent more value for booking travel through the Chase portal when you close the Sapphire Reserve.

For some rewards enthusiasts, it can even make sense to sign up for a new credit card before closing the old one.

For example, say you have The Platinum Card® from American Express and a stash of American Express Membership Rewards points. You don’t want to pay the annual fee on this card for yet another year, so what should you do?

You could sign up for the Amex EveryDay® Credit Card from American Express*, which lets users earn Membership Rewards points with no annual fee. American Express differs from Chase in that your Membership Rewards points are stored to your Amex account, rather than each credit card account. As long as you retain a card in good standing with Amex, you can safely close your Amex Platinum without losing out on any rewards.

What happens to points and miles if you cancel a co-branded credit card?

While some rewards credit cards dole out points in their own programs, co-branded credit cards do things differently. If you have an airline credit card or hotel credit card, for example, the rewards you’ll earn will be in your loyalty program account regardless of what you decide to do with your credit card.

Let’s say you signed up for an American Airlines credit card and earned 60,000 miles your first year. AAdvantage cardholders are not subject to their expiration policy as long as their card account stays open. However, once you close your credit card, your American AAdvantage miles will expire if you have no activity in 24 months.

That said, it’s important to know and understand your favorite loyalty program’s policies since they all work differently. Delta SkyMiles and United MileagePlus program miles never expire, so you won’t have to worry about losing them. Meanwhile, World of Hyatt and Hilton Honors points expire after 24 months of inactivity.

Other common ways to lose points and miles

Other than closing your card account, there are a few other ways you can lose your points and miles. Keep these in mind if you’re eager to save up a good pile of rewards to fund your next trip or a new iPad.

Missing a credit card payment

Depending on the issuer and the terms and conditions of your card agreement, missing the deadline to pay your credit card bills could lead to you losing out on any rewards you would have made on that month’s purchases.

Some card issuers will deduct points or miles in your reward account when you pay late, while others may bar you from redeeming rewards until you get caught up on payments. The exact number of payments that can be missed without penalty will differ by card or issuer. You may need to pay your bills on time for a few months before the restriction on your rewards is lifted.

You should keep in mind that any rewards you forfeit because you failed to pay will likely be gone for good.

Breaking the rules of the rewards program

Points and miles can also be taken away if the card issuer suspects you’ve broken the rewards program rules. Such activities include trying to sell points, committing fraud, “churning” points (essentially, signing up for new cards just to get bonuses and then closing them) or participating in any other activity that is considered a violation.

How to avoid losing points and miles

If you want to keep your credit card rewards in good standing so you can use them when you’re ready, you have plenty of options to consider. The following tips can help you avoid losing rewards, depending on your situation:

• Maintain a credit card from the same issuer that earns the same type of rewards. As mentioned already, sometimes maintaining a different rewards credit card in good standing from the same issuer is enough to retain your points and miles. Read over the terms and conditions of your credit card’s program so you know for sure. If not, you may need to take the extra step of transferring your rewards from one card to another.
• Earn loyalty points through qualifying activity. If you have points in a frequent flyer program or a hotel loyalty program, you can restart the clock on your rewards with qualifying activity. This could include anything from a paid flight or hotel stay to using your program’s shopping portal or dining program.
• Redeem your rewards before you cancel. You can also simply cash in your rewards before you cancel. Look for easy options like gift cards and merchandise, which could help you splurge for something fun, or big-ticket items like Apple products.
• Transfer your points to another person. Some programs, like Citi ThankYou points, let you transfer your points to other members. Just remember that transferred points sometimes have their own expiration dates. With Citi points for example, shared points are valid for only 90 days after they are received.
• Transfer your points to another program you’ll use. If you have flexible travel points, consider transferring them to your favorite airline or hotel program before you cancel your card.
• Donate your points to charity. Keep in mind that many credit card rewards programs let you donate points or miles to charity, which can be a wonderful gift. As an example, the American Red Cross is able to accept miles from American Airlines, Delta Air Lines, United Airlines and more.

Bottom line

If you have rewards points in your account but you need to cancel your credit card, be sure to have a plan in place ahead of time. By using your points, transferring your rewards to another person or having another credit card in the same program, you can avoid having those hard-earned rewards go to waste.

*Information about the Amex EveryDay Credit Card from American Express has been collected independently by CreditCards.com. The issuer did not provide the details, nor is it responsible for their accuracy.