Do I Keep My Rewards When I Close a Credit Card Account?

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TPG reader Steven sent me a message on Facebook to ask about holding on to credit card rewards:

“If I cancel my Delta card, will I get to keep the miles I've earned?”

Earning points and miles is fun, but the whole point of earning them is to use them, so it's natural to be wary of anything that might put your rewards at risk. This is one of the most common questions I get, probably because credit card issuers themselves offer mixed signals. The short answer is that you usually get to keep your rewards after canceling a card, but there are some important exceptions.

The points and miles you earn from an airline, hotel or other co-branded card are generally safe even if you close your credit account. For example, rewards from the Gold Delta SkyMiles Credit Card from American Express are ultimately administered by Delta, and your relationship with Amex generally doesn't come into play. Once the miles are in your SkyMiles account, they're yours (though card issuers may claw back rewards earned from purchases that are later returned or refunded).

The story is different for rewards from credit card loyalty programs, such as Chase Ultimate Rewards points or Barclaycard Arrival miles. Those rewards can be forfeited if you cancel your card, so it's important to transfer or redeem them before closing your account. In some cases, you can simply transfer those points to a different account in the same program. For example, you can combine points from the Chase Sapphire Preferred Card and Ink Plus Business Card; just make sure to do it before you close the account in question.

A lot of people get confused about this because credit card phone reps routinely suggest that closing your account will put your rewards in jeopardy, even for co-branded cards. What they may mean is that points earned that haven't yet appeared in your frequent-flyer or hotel account may be lost. Also, canceling your card could lead to an extended period of inactivity in your loyalty account (because you're no longer earning on the card), and that could cause your points or miles to expire. However, that's an indirect result — canceling the card itself is not the issue, and there are plenty of other ways to keep rewards from expiring.

For more on protecting your credit card rewards, check out these posts:

• Ten Commandments for Travel Rewards Credit Cards
• 8 Questions (and Answers) about Travel Rewards Cards

If you have any other questions, please tweet me @thepointsguy, message me on Facebook or send me an email at info@thepointsguy.com.