Do I Lose My Rewards When My Credit Card Closes?

Quick Answer

You might lose your credit card rewards if the card issuer closes your account because your credit score drops, you miss payments or you’re gaming the rewards program. Otherwise, you might be able to use or transfer your points before closing your card, or get a grace period to use them after closing your account.

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You might lose the credit card rewards in your credit card account when your account closes. However, if you used a credit card to earn miles or points in an airline or hotel loyalty program, those rewards won't disappear. Some credit card issuers also give you a grace period to use your rewards after your account closes.

What Happens to Your Rewards if You Cancel a Credit Card?

What ultimately happens to your rewards can depend on why the card was closed and your card's terms. There also may be a big difference depending on the type of rewards card.

General Rewards Cards

General rewards credit cards offer cash back or points in the card issuer's rewards program. In either case, the rewards accrue within your credit card account. They're part of the credit card issuer's rewards program—sometimes, you even earn "cash back" as points in the card issuer's program.

You may be able to redeem cash back rewards by requesting a check, statement credit or money transfer to a linked bank account. With card issuers' rewards programs, you'll often have a long list of redemption opportunities, including cash back, travel, merchandise and gift cards.

Because your rewards are managed by the card issuer, closing the credit card could result in losing the rewards. However, you'll often have a small window of time when you can redeem your rewards after closing your card—it just depends on the card issuer's rules and the card's terms.

Airline and Hotel Rewards Credit Cards

With airline credit cards and hotel credit cards, the points or miles that you earn are automatically added to your loyalty program account. As a result, you can keep the rewards even if you close your credit card. However, review the program's rules because they might expire due to inactivity.

How to Cancel a Card Without Losing Your Points

There are four options if you want to close your credit card without losing your rewards:

  1. Switch to a different card. Some credit card issuers let you "product change," or switch between cards in the same rewards program without closing your account. It can be a good option if you're not getting enough value from a card to justify its annual fee, or if another card's bonus rewards categories better align with your spending.
  2. Transfer the points to another card. If you have multiple cards in the same program, you can sometimes move rewards between accounts. Make sure you move the rewards from the card before closing it.
  3. Transfer the points to partner travel programs. Similarly, some card issuers' rewards programs let you transfer rewards to partners' frequent travel programs. Transfer the rewards before closing the card, and you can redeem your points or miles later.
  4. Use your points. You also won't lose any rewards if your rewards balance is at zero. Research the best way to use that program's points and enjoy the rewards you earned.

Some card issuers give you a grace period to use or transfer your rewards after closing your credit card. But review your card's terms before closing it.

Also, if you opened a credit card primarily to earn an intro bonus, think twice about quickly using the rewards and closing the card. Card issuers might consider that gaming the system and take back the rewards.

If you want to close the card because of an annual fee, ask about product changes and retention offers. Some card issuers offer additional rewards or a statement credit if you keep your card open. However, you may need to call (and sometimes say you're considering closing the card) to find out if you qualify for a retention offer.

Reasons Your Issuer Could Cancel Your Credit Card

Although you can take steps to use or transfer your points before closing a card, you won't necessarily have time to react if the card issuer closes your account. This can happen for various reasons, including:

  • You don't use the card. Card issuers may close inactive accounts to help limit their costs and risk. Try to use your card every few months to keep it active. Or, consider using it to pay for a low-cost subscription and use autopay to pay off the balance each month.
  • Your credit score drops. A lower credit score indicates the person is more likely to miss a payment in the future. Credit card issuers might decrease your credit limit or completely close your account if your score drops significantly.
  • You fall behind on payments. Card issuers might close your account if you haven't made your payments on time. You may also lose promotional interest rates and have to pay late payment fees.
  • The card issuer thinks you're gaming the rewards program. A card issuer might close your account and void your rewards if it thinks you're trying to game the rewards program.
  • The card is discontinued. Some credit cards get discontinued or replaced and you may have to close your account or switch to the new card.

Depending on why the card issuer wants to close your account, you might receive a warning about the closure or grace period.

Does Closing a Rewards Card Affect Your Credit Score?

Closing a credit card might hurt your credit scores because it decreases your available revolving credit, which can lead to a higher credit utilization rate.

A lower utilization rate is generally better for your credit scores, which is why closing a card can hurt your credit. However, if you can maintain a low utilization rate (such as below 10%) after you close your card, you might not see a big score change.

There's also often a myth that closing an account will immediately lower the average age of your credit accounts, which could hurt your scores. But closed credit cards can stay on your credit reports for up to 10 years and are still included in age-related credit scoring factors.

Review Your Options Before Closing a Card

If you're considering closing a credit card and worried about losing rewards, review the program's terms carefully to see what can happen. You might want to use or transfer the points to a different loyalty program if you'll forfeit your rewards right away, or have a plan for using them if you receive a grace period.

When you want to hold on to your points but cancel your card, ask the card issuer if there are any options for a product change. Or, look into opening a new card that's part of the program and then transferring your points. Experian can show you credit card offers based on your unique credit profile and filter the results by card issuer and type.