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Canceling Cards
Losing your credit card points when you cancel a credit card is a very real fear for a lot of people and for good reason. Some of these companies will claw back points. In general we recommend sticking to the 12 month rule as a good rule of thumb with any card. This will protect you from many of the consequences of canceling a card.
AMEX
Amex is the most notorious for clawing back their bonuses after giving them out. Here is what we have learned. ALWAYS wait the 12 months before canceling your card. This helps you avoid the dreaded AMEX popup jail. Also, if you have multiple cards earning membership rewards points with AMEX, you should be fine to cancel your card at the 12 month mark and not have them claw back the points.
If you have a Co-Branded Card like the Hilton card, as long as your points are securely in the Hilton rewards ecosystem, and it has been a year, you should be fine there too.
If you only have one AMEX card with a bucket of points and you are looking to cancel, likely your best option is to transfer those points to a transfer partner to hold onto them. While this is not ideal, it should protect your points. This is why we often recommend downgrading instead of canceling when possible.
Chase
Chase makes it pretty clear in their rewards program which card your points are sitting on. We recommend before canceling with Chase to transfer all your points to an alternate card, thus protecting them. While they aren’t known for being as aggressive with their points as AMEX, you can be sure if you cancel a card with points sitting on it, they will not be giving them back to you. Also, Chase offers some really great cards to downgrade to, so look into that, as it could maintain your points, and will not hit your credit score.
Co-Branded Cards
Co-Branded Cards are cards that are attached to an airline or hotel. These cards often quickly transfer your points, that you earn through the credit card, into the hotel or airline rewards program. These are often the safest cards to cancel, as long as all your points have transferred over to the Airline/Hotel Rewards ecosystem. And again, we will reiterate until we are blue in the face, WAIT THE YEAR. Without waiting out that year, you risk being black listed with these banks that offer great rewards.
Your Options
Truly your options when it comes to canceling and maintaining points are these:
- Downgrade the card – This generally keeps your points (double check with the agent) and also maintains your credit score without any extra dings. This is a great option if your main reason for cancelation is a high annual fee.
- Turn Points to Cash – You can always use the handy “pay your bill with points” features to cash out before pursuing cancelation.
- Transfer to an airline or hotel partner – if you know these are points you will use, transfer them to a partner that makes sense for you and your family.
- Transfer to another card within the same bank – Moving points helps us with lots of redemptions but it can also help protect your points in the event of a card cancelation.
