Protect Your Credit Card Rewards: Avoid Point Loss from Account Closure or Inactivity

Introduction: Why Credit Card Rewards Matter

Let’s say you’ve been using your credit card wisely for the past year—booking travel, shopping online, paying bills. Slowly but surely, you’ve been collecting points or miles. It feels like free money, right?

But then, life happens. Maybe you forget to use the card for a few months. Or perhaps you close the card thinking you won’t need it anymore. One day, you log into your rewards account and realize—the points are gone.

If this sounds familiar, you’re not alone.

Understanding how credit card rewards work—and how to protect them—can save you money, time, and frustration. In this guide, we’ll walk you through how to avoid losing your points due to inactivity, card closure, or program changes.

What Are Credit Card Rewards?

Credit card rewards are perks offered by card issuers to encourage spending. These rewards typically come in three main forms:

1. Points: Often redeemable for travel, gift cards, or merchandise.
2. Miles: Typically used for travel-related expenses like flights and hotels.
3. Cash Back: A percentage of your spending returned to you as cash or statement credits.

Every time you swipe your card, you’re earning something in return—but those earnings come with rules.

How Credit Card Rewards Can Disappear

1. Inactivity Can Expire Your Points

Most loyalty programs consider accounts “inactive” if there are no transactions for a certain period, usually 12 to 24 months. When that happens, your points may expire.

Real Example: American Airlines AAdvantage miles expire after 24 months of inactivity.

Tip: Set reminders to use your card or make a small purchase every few months.

2. Card Closure Means Rewards Closure

When you close your card account, many banks will wipe out the rewards linked to it—unless you use or transfer them beforehand.

Tip: Redeem or transfer your points before closing the account. Some programs allow transfers to travel partners (e.g., Chase Ultimate Rewards to Hyatt).

3. Program Changes Can Shrink Your Rewards Value

Banks and travel partners can change their reward policies at any time. Suddenly, your points are worth less, or certain redemptions are no longer available.

Tip: Stay updated with emails or program news. Use your points strategically instead of hoarding them forever.

Keeping Credit Card Rewards Active: Simple Strategies

1. Make a Small Transaction Regularly

Just buying a $1 coffee every few months can reset the activity timer.

2. Link to Subscription Services

Attach your card to monthly services like Netflix or Spotify. Even small, recurring charges keep the card active.

3. Use Shopping Portals

Many credit card companies offer online shopping portals where purchases earn extra points.

4. Transfer Points

Transferring points to airline or hotel partners often counts as activity.

5. Use the Card for Bills

Set it up for utility, mobile, or internet bills.

Redefining Value: How to Get the Most Out of Your Credit Card Rewards

1. Know the Point Value

Points don’t always equal a cent. For example, some travel redemptions offer 1.5 cents per point, while gift cards may only give you 0.5 cents.

2. Avoid Overpaying for Rewards

Don’t buy something just to earn points if you don’t need it. That defeats the purpose.

3. Redeem Wisely

Look for the highest-value redemptions—usually travel or transfer partners.

4. Understand Your Card’s Perks

Read the fine print or app notifications. Some cards offer rotating categories with boosted rewards.

Credit Card Rewards in the UK vs the US: Key Differences

• UK Cards often have lower sign-up bonuses but come with fewer strings attached.
• US Cards offer bigger bonuses, but the terms (minimum spending, expiry, etc.) are stricter.

What to Do If You’re Losing Rewards

1. Call Customer Service

Some issuers may reinstate expired points as a goodwill gesture.

2. Check for Extensions

Programs sometimes extend deadlines during global events (like COVID-19).

3. Redeem for Whatever You Can

Even if the value is less, getting something is better than losing everything.

Credit Card Rewards and Taxes

In most countries, rewards earned through spending are not taxable. However, if you receive points without spending (like a bonus), it might be considered income.

Tip: Consult a tax advisor if you earn large rewards or business card perks.

Final Thoughts: Don’t Let Your Rewards Go to Waste

You worked hard (or at least spent wisely) to earn those credit card rewards. Losing them because of a rule you didn’t know about is frustrating, but avoidable.

Stay informed, use your cards strategically, and set reminders. That way, your rewards will keep working for you—not disappear into the fine print.

References

1. American Express Rewards FAQs: https://www.americanexpress.com/
2. Chase Ultimate Rewards: https://www.chase.com/
3. NerdWallet Credit Card Reward Guide: https://www.nerdwallet.com/
4. The Points Guy: https://www.thepointsguy.com/