After a year or two of accruing miles and points, you may be tempted to start “shaking” credit cards: closing and reopening accounts to receive a second, third, or fourth sign-up bonus after meeting the requirements. minimum spending. Some banks will not allow you to earn a new bonus within a few years after closing an identical account, while others are much more willing to hand over thousands of points in exchange for another chance to keep you as a customer. Either way, you will generally need to close your account before opening a new one.
We won’t go into the complexities of turmoil, but this activity definitely carries some risks. The main negative to consider is that closing your account (even if you plan to reopen it a bit later) may cause you to lose your hard-earned points, depending on the type of rewards currency you have managed to accumulate. .
In general, accounts that transfer miles to an airline-run frequent flyer program or points account with a hotel chain (and not the bank) are completely isolated from your credit card accounts. So if you close a card, your miles with the airline will stay in that account indefinitely. Some cards extend the expiration date of your mileage for as long as you keep an active credit card account, so that’s something to keep in mind, but in general, the bank can’t touch the miles on your frequent flyer account. , so those are yours to save even close the affiliate card.
However, the points held directly with the bank are a completely different story. Accounts with American Express Membership Rewards, Chase’s Ultimate Rewards, and Citi’s ThankYou remain the property of the affiliated credit card program. When you close a line of credit linked to one of those rewards accounts, your points will disappear, assuming it is the only credit card you have associated with that same rewards account.
One way to protect those points is to open a new account that is set up to deposit points to your existing account. If you have an American Express Gold card and an EveryDay card assigned to a Membership Rewards account, for example, you can close one of the cards without the risk of losing your points. However, if you close both lines of credit at the same time, or if you only have one card linked to that particular Membership Rewards account, you will lose the remaining points.
The best thing to do is have the bank representative clarify whether or not you will be able to keep your points after closing the affiliated card. Policies change from time to time and the customer service representative will have access to the latest information. They may be able to move points from one account to another or make recommendations on how to secure your balance.
If it is clear that you will lose your points but still need to close the card, transfer your points to a partner program, such as an airline or hotel chain. In general, it is best to keep your points with the credit card program to maximize flexibility, but if you are about to lose them, you should be able to retain some of their value by transferring them to a partner. However, you will need to keep the rewards card open until the transfer is complete, so do not have your bank close your card until the points appear in the member’s account.