TPG reader question: Can a card issuer take back my bonus points if I get refunded?

Oct 12, 2020

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Editor’s note: This article is part of a column to answer your credit card questions. If you would like to ask us a question, tweet us at @thepointsguy, message us on Facebook or email us at info@thepointsguy.com

While travel is on a long path to recovery, credit card bonus offers are already coming back strong. Even if you’re not comfortable with traveling, there are numerous opportunities to pad your points and miles balances for when you’re ready.

However, if you trying to reach the spending requirement needed to hit a sign-up bonus, it’s important to know about what does — and what doesn’t — count. This is especially relevant as travel (or other plans) may get canceled during the ongoing pandemic, resulting in refunds to your card.

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In this week’s edition of our reader question series, Edgar asks:

Will a card issuer take back points from a sign-up bonus if I meet the spending requirement and six months later get a credit that brings me back under the threshold?

Edgar, TPG reader

 

First, you should know that not all spending counts for a new card welcome offer or sign-up bonus. For instance, here are the terms straight from Amex for the American Express® Gold Card.

If we in our sole discretion determine that you have engaged in abuse, misuse or gaming in connection with the welcome bonus offer in any way or that you intend to do so (for example, if you applied for one or more cards to obtain a welcome bonus offer(s) that we did not intend for you; if you cancel or downgrade your account within 12 months after acquiring it; or if you cancel or return purchases you made to meet the Threshold Amount), we may not credit Membership Rewards points to, we may freeze Membership Rewards points credited to or we may take away Membership Rewards points from your account. We may also cancel this Card account and other Card accounts you may have with us.

The following charges do NOT count towards the spending requirement: fees or interest charges; purchases of travelers checks; purchases or reloading of prepaid cards; purchases of gift cards; person-to-person payments; or purchases of other cash equivalents.

Related: 11 ways to hit minimum spending requirements

If you earn points or miles from a purchase and then six months down the line you get a refund, your credit card issuer will generally take back what you earned.

(Photo by Billion Photos/Shutterstock)

If you’ve already used those rewards, the issuer could put a credit against your account, or if you’ve closed out the account, they could come after you. For this reason, I don’t recommend buying things you plan to return just to earn points and miles.

However, sign-up bonuses are trickier. Suppose you spend $3,000 in three months and earn a large bonus, and months down the line you get a credit. During the pandemic, that might be triggered by canceled flights or other large purchases that are refunded unexpectedly.

That’s where things can get dicey. Your card issuer may or may not take back your bonus, at least not automatically (though they might take away the points you earned from your spending on the purchase in question).

Related: Ultimate guide to card application restrictions

That being said, within the rules of each program, card issuers — like American Express, who tend to be most strict — absolutely have the ability and authority to claw back points, in which case you’d need to convince them that you weren’t trying to be tricky.

I’d recommend spending over and above the minimum spending requirement so you don’t risk missing the threshold (or getting points clawed back) after getting a statement credit for a refund, even if it’s unexpected.

Featured photo by Georgijevic/Getty Images. 

American Express® Gold Card

With some great bonus categories, the American Express Gold Card has a lot going for it. The card offers 4x points at restaurants worldwide, at U.S. supermarkets (up to $25,000 per calendar year; then 1x), and 3x points on flights booked directly with airlines or through amextravel.com.

Apply Now
More Things to Know
  • Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months.
  • Earn 4X Membership Rewards® Points on Restaurants worldwide, including takeout and delivery.
  • Earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub, Seamless, The Cheesecake Factory, Ruth's Chris Steak House, Boxed, and participating Shake Shack locations. This can be an annual savings of up to $120. Enrollment required.
  • No Foreign Transaction Fees.
  • Annual Fee is $250.
  • Terms Apply.
  • See Rates & Fees
Intro APR on Purchases
N/A
Regular APR
See Pay Over Time APR
Annual Fee
$250
Balance Transfer Fee
N/A
Recommended Credit
Excellent/Good
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.