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What Happens to Your Credit Card Rewards When You Close an Account?

By U.S. News & World Report

When you close a credit card, it’s typically a use-it-or-lose-it situation for rewards — and you may miss out on huge value if you don’t take action.

“Too many cardholders forget or don’t realize that when you close that account, you could lose all those unredeemed points or miles,” says Hillary Seiler, creator of “My Money Playbook” and NFL money coach. “Never assume those rewards will transfer automatically.” Here’s what to know about rewards when you close a credit card and how to get your rewards value before your account is closed.

[Read: Rewards Credit Cards]

How Issuers Handle Rewards When You Close a Card

Issuer policies vary on what happens to rewards after you close an account, but you should expect to lose rewards immediately or soon after. In most cases, your rewards are forfeited upon account closure, but you could retain rewards if you have another card with the same issuer. Some issuers allow redemptions for a short time after account closure in qualifying circumstances.

David Shipper, strategic advisor for financial data company Datos Insights, says it’s a safe bet to redeem as many points as possible before closing an account. “There’s no going back,” he says.

— American Express: You will immediately forfeit any unredeemed Membership Rewards points. However, you can retain your points with another American Express card or checking account. New York cardholders have 90 days after account closure to redeem points.

— Chase: You’ll lose unused Chase Ultimate Rewards points if you close your Chase card account, but you can move your points over to another Chase card before account closure.

— Capital One: When you close your Capital One account, you’ll lose unredeemed rewards. Before closure, accounts not in good standing with Capital One may lose unredeemed rewards or have limited redemption options.

— Citi: If Citi closes your card for any reason other than inactivity, you’ll immediately lose the ThankYou points associated with that account. However, you can get up to 90 days from account closure to redeem your points if you close your account, Citi closes it for inactivity, or you have a Citi consumer checking account enrolled in ThankYou rewards.

There’s an exception for co-branded cards, though. When you earn co-branded rewards, such as hotel points or airline miles, your earnings are typically transferred to your airline or hotel loyalty program account with each statement. A credit card account closure shouldn’t affect your loyalty program account, though you should monitor inactivity expiration policies. For example, airline loyalty program points may expire after 24 months of inactivity.

[Read: Best Credit Cards]

How to Save Your Rewards When Closing a Card

Don’t count on being able to redeem rewards after the account is closed. Instead, figure out how you’ll handle your rewards balance before closure. Depending on your account, your options may include:

— Redeeming cash back for statement credits, gift cards or merchandise

— Transferring points to travel partners

— Moving rewards to another card

— Transferring points to another cardholder if permitted

Small point balances may be best used for cash back, gift cards or merchandise. It’s also easy to move rewards to another card with the same points currency. For example, if you have two AmEx Membership Rewards cards, you can close one of the accounts and keep your points active with the other account.

[Read: Airline Credit Cards]

You may even have the flexibility to transfer points to a participating loyalty program. If you have a significant stash of points, it could be worth locking those away with a travel partner that can offer more time to redeem them.

“In many cases, points can be transferred to other loyalty programs within a network of loyalty partners,” says Len Covello, chief technology officer at global loyalty technology provider Engage People.

You can log in to your AmEx Membership Rewards, Chase Ultimate Rewards or Capital One account to transfer your points balance to participating airline and hotel loyalty programs. Most programs transfer points at a 1:1 ratio almost immediately or within a few business days.

[Read: Cash Back Credit Cards]

Other Considerations Before Closing a Card

Rewards aren’t the only factor to consider when you close a card. Some cards offer cardholder benefits, such as statement credits, which you should take advantage of to get more value from your card before you close it. For example, if you get a $15 Uber credit each month, make sure you’ve redeemed your statement credit before closing your account.

Not sure you want to close your card? You could always check for a retention offer to sweeten the deal. If you contact the credit card issuer, you might get an offer of bonus points or a fee waiver to encourage you to keep your card open. If the deal works for you, you can carry on, and you don’t need to transfer or redeem your points until you’re ready to use them.

“If you’re closing the card because of an annual fee, fraud or an upgrade to a new card, don’t just walk away,” says Seiler. “Ask them to waive the fee to keep you on board, transfer your points to the new card, or offer you a retention bonus to stick with your current one. It’s worth a call every single time. Don’t leave money on the table.”

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What Happens to Your Credit Card Rewards When You Close an Account? originally appeared on usnews.com

Update 05/11/26: This story was previously published at an earlier date and has been updated with new information.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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