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The Points Guy believes that credit cards can transform lives, helping you leverage everyday spending for cash back or travel experiences that might otherwise be out of reach. That's why we publish a variety of editorial content and card comparisons: to help you find a great card to turn your goals into reality.
Our site may earn compensation when a customer clicks on a link, when an application is approved, or when an account is opened with our partners, and this may impact how or where these products appear. While we don't cover all available credit cards, our editorial team creates and maintains all of the analysis of these cards, and our content is not influenced nor subject to review by any credit card company, bank or partner prior to (or after) publication. Please view our advertising policy and product review methodology for more information.
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Here’s why you should never close your credit cards before the 1-year mark
Ethan's been a frequent flier for as long as he can remember, from studying abroad in Paris to moving to Shanghai after graduating college, where he served as TPG's eyes and ears for all things travel in the Asia-Pacific region. If you asked him where he wants to travel next he'd quote Anthony Bourdain and tell you "anytime I'm eating spicy noodles in a bowl, I'm happy."
Credit card writer Danyal Ahmed is an avid traveler, averaging about 100,000 aeronautical miles per year. He regularly applies that knowledge and his expertise in credit cards to his role as a credit card writer at TPG.
also contributed to this story
January 27, 2025 • 8 min read
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By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
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Quick summary
Canceling a travel rewards credit card before the first account anniversary can lead to significant negative consequences, including forfeited rewards and possible account closures.
Issuers may view early cancellations as 'gaming' the system, potentially resulting in loss of points, ineligibility for future bonuses or even closure of other accounts.
Most issuers provide a grace period after the annual fee posts, allowing cardholders to cancel and receive a refund if they choose not to keep the card.
Keeping cards open for longer periods can also benefit your credit score, as account age is a key factor.
What to consider
Canceling a card before the first anniversary may trigger penalties, including clawbacks of previously awarded rewards and restrictions on future bonus eligibility.
A pattern of opening and closing cards, even at the one-year mark, can make you ineligible for future welcome offers with some issuers.
Account age contributes to your credit score, so closing cards too soon can have a long-term impact.
What you'll miss from the article
Detailed guidance on timing cancellations, maximizing retention offers and understanding issuer-specific rules to protect your rewards and credit profile.
Generated by AI with support from our editorial team.
One of the biggest mistakes I see people making when they begin their points and miles journey is to rapidly open tons of travel rewards credit cards without any plan for what they’re going to do with them. Some cards might entice you with a large welcome bonus, and others will be long-term keepers, but it’s possible that after 11 months of using the card and experiencing its benefits, you might change your mind about it and cancel the credit card before the annual fee is due.
So, is it fine to cancel a credit card before the first account anniversary? And how can opening and closing credit cards for rewards affect your credit?
This is one of the most common questions we receive, especially right now, as people are still looking to minimize their out-of-pocket costs as they feel the financial strain due to due to rising costs and higher interest rates.
The answer is worth repeating loud and clear: Never, under any circumstances, should you close a credit card less than one year after opening it. While it is possible to do so, there are many reasons why canceling a credit card before the annual fee is due is a bad idea.
Let’s start with some of the consequences you might expect if you do this.
Why you should keep your credit cards open for more than a year
THE NAKA ISLAND, A LUXURY COLLECTION RESORT AND SPA
However, it doesn’t really matter how pure your intentions are. If the bank suspects you’re trying to take advantage of it (perhaps by opening a card just for the welcome offer), it may take action against you. As an example, let’s look at the terms and conditions of Delta Air Lines' cobranded cards with American Express. Nearly every Amex card contains similar language in its terms (emphasis mine):
If you have a history of cancelling or downgrading American Express Card accounts within your first year and you cancel or downgrade your new Card account within your first year, we may not credit, we may freeze, or we may take away Membership Rewards® points from your account. If we determine that you have engaged in abuse, misuse, or gaming in connection with this offer in any way or that you intend to do so, including if you return purchases you made to meet the Threshold Amount, we may not credit, we may freeze, or we may take away the Membership Rewards® points from your account. We may also cancel any accounts you have with us.
There’s plenty of legalese in the terms and conditions of a credit card application, but if you’re wondering whether Amex is serious about this bit, I can tell you that it is. Over the last few years, we’ve seen countless crackdowns and points clawbacks for people trying to skirt the rules in various ways, including self-referring to Amex cards and abusing limited-time bonus categories, to name a few.
I’ve already spent my welcome offer — am I safe?
If you earned a bunch of points or miles and have spent them already, you may think you're in the clear. However, history shows that you're not. In the past, we’ve seen Amex take Membership Rewards balances into the negative when clawing back welcome offers that had already been redeemed. The terms are clear that you might face other disciplinary action, including the closure of your other Amex accounts. Simply put, this is not worth the risk.
I don’t want to pay the annual fee again — what should I do?
There’s actually no reason to close a card early instead of waiting until the annual fee posts. Most issuers give you a grace period of 30 days or so after the fee posts, during which you can get the fee refunded if you decide to cancel the card. Even if you're 100% sure you’re going to close a card, wait until a week or two after the annual fee posts. This should ensure that you aren't penalized for opening and closing credit cards just to earn rewards.
Of course, you should also consider checking on a potential retention bonus before closing a card entirely. American Express, in particular, is known for offering bonuses as an incentive to keep (and use) a card for another year.
When I’m analyzing my Amex cards each year and deciding which ones to keep and which ones to close, there’s another factor I consider. Amex now includes a “welcome offer eligibility” checker that may pop up during your application and alert you that you’re ineligible to receive a welcome offer, even if on paper you’ve done everything right (you’ve never had that specific card before, etc.). You’ll find this alluded to in the card’s terms and conditions:
You may not be eligible to receive a welcome offer if you have or have had this Card or previous versions of this Card. You also may not be eligible to receive a welcome offer based on various factors, such as your history with credit card balance transfers, your history as an American Express Card Member, the number of credit cards that you have opened and closed and other factors.
Amex and other issuers have clearly been making moves to discourage people who are opening credit cards just for the welcome offers and not growing into valuable long-term customers. While we don’t know exactly what Amex’s offer eligibility algorithm looks for, one common report we’ve heard is that people who close cards at the one-year mark (right after the annual fee posts) find themselves ineligible to earn welcome bonuses on new Amex cards in the future.
This means that when I apply for an Amex card, I plan on keeping it for at least two years, even if I’m primarily interested in the welcome offer. This makes me a bit more selective, as I only pick valuable cards to justify two years’ worth of annual fees. Potential cardmembers should take a hard look at the benefits of each card because a card’s perks can often help offset the annual fee.
The above points do not include the potential impact on your credit score from closing cards earlier than necessary.
SOLSTOCK/GETTY IMAGES
While a few months aren’t likely to make a huge difference in the grand scheme of things, 15% of your credit score is based on your length of credit history or the age of accounts. The longer you keep cards open, the more they’ll boost your credit score. This means that you should always wait until the last possible moment to close a credit card and make sure you’ve exhausted all other options first.
Bottom line
While there’s nothing wrong with opening a credit card primarily for the short-term benefit of the welcome bonus, you should never, under any circumstances, close that card before your first account anniversary. Even then, understand that if you make a habit out of closing cards after exactly 12 months, you might find yourself ineligible for future bonuses or getting your applications denied with some issuers.
By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
