Smart SpendingSmart Spending

5 ways you can lose credit card rewards

You might assume that once accrued, award points are yours to use whenever you'd like, but that's not always true. Here are tips on keeping your reward points intact.

By Aug 26, 2013 11:58AM

This post comes from Jason Steele at partner site logoCredit card users often save their points, miles and cash back for years with the hope of redeeming them for their well-deserved rewards. Yet in the back of their minds, some may fear that their rewards won't be there when the time comes.

Image: Woman with mobile phone and credit card, smiling © Pando Hall, PhotographerSadly, there are several ways that credit card rewards can fail to materialize. Here are five of the most common ways points can disappear, and how to keep it from happening to you.

1. Expiration

Many airline frequent flier programs have expiration dates. For example, if American AAdvantage miles aren't earned or used at least once in any 18-month period, the miles are lost.

How to keep this from happening to you: Keep track of all your loyalty points using a website such as Award Wallet. Although some airlines block these sites from accessing customers' frequent flier information, American Airlines recently announced that it would again allow members to track their program using Award Wallet.

2. Inactivity

Like airline expiration policies, some credit card programs will take away your rewards if you don't continue to use the card. For instance, the NFL Extra Points card from Barclaycard will close accounts of cardholders who do not make a charge for six consecutive months.

How to keep this from happening to you: Cardholders need to scrutinize the fine print of their award programs to look for issues like this. If your card has an inactivity clause, you could set up an automatic recurring payment such as a cellphone bill so the card won't be closed.

3. Late payments

Some credit cards have instituted terms that withhold rewards when the cardholder makes a late payment.

How to keep this from happening to you: Missing out on rewards is just one of several reasons you should never pay your credit card bill late. To avoid this, set up regular electronic payments through your bank or the card issuer.

4. Account closures

When the card issuer operates the rewards program, cardholders will usually forfeit rewards when their account is closed for any reason. This includes customers canceling their credit card as well as banks that close delinquent accounts. For example, the Costco True Earnings Card from American Express issues reward vouchers to customers once a year in February, but cardholders who cancel their card before then will not receive their annual rewards.

How to keep this from happening to you: If you need to close a credit card account, make sure to redeem all of your rewards in bank programs. Obviously, you should avoid becoming delinquent in your payments, but if you fear that your card issuer might close your account for any reason, be sure to cash out your rewards as soon as possible. Also keep in mind that many credit cards issue rewards to a third-party program such as an airline or hotel chain, and customers' balances may still be safe when they close their credit card account.

5. Program changes

All loyalty programs have terms and conditions that allow companies to make changes any time they want. Most of the time, these changes result in rewards being harder to redeem, or requiring more points or miles.

For instance, earlier this year several of the major hotel chains changed their frequent guest programs to require more points for award stays. And recently, Delta announced large increases in the miles required for many business class international award flights.

How to keep this from happening to you: Although investors are encouraged to take the long view, reward credit card users should be very cautious about accumulating vast sums of points and miles for more than a year or two. Like those holding cash in a times of heavy inflation, those who hoard points and miles will inevitably see the value of their savings diminish.

Thankfully, most programs give customers several months' notice before making major alterations, so keep track of any changes and try to redeem your points and miles before they go into effect.

More from
Aug 26, 2013 3:44PM
It is neither 'health' nor 'care' I can tell you that. This is going to cause more stress, heart attacks, sickness, anxiety, worry and depression than any other risk factor ever could.
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.