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When you think about closing a rewards credit card, you may wonder what happens to your unused rewards. Most likely, you'll want to keep those hard-earned points or miles or cash back. But will issuers allow you to do that? There is no simple answer to this question. Credit card issuers and banks have different policies on that matter, and many of them give you a chance to keep or use your rewards before you lose them for good.
There are many different types of rewards credit cards, but the two big groups are general rewards credit cards and co-branded credit cards. When credit cards are co-branded with an airline, hotel (like the Choice Privileges® Mastercard® card) or store (like the Amazon Visa credit card), you can usually keep your rewards, even after you have closed your card. Rewards earned with co-branded credit cards get transferred to your loyalty program account and remain active as long as you keep the account active and show necessary activity to keep your rewards from expiring.
Things are a bit complicated with general rewards credit cards. However, in many cases, you will be able to use your rewards before you lose them. With cash back credit cards, you generally need to redeem cash back before closing a card so that you don't lose it. There is an exception, though. If you close a Discover credit card, your cash back will be automatically credited to your bank account or you will be sent a check.
If a rewards credit card is a part of a specific program, like Membership Rewards (Amex), Venture Rewards (Capital One), Thank You Rewards (Citi), or Ultimate Rewards (Chase), rewards from these types of credit cards can be redeemed in multiple ways, including transferred to partners, transferred between accounts, redeemed for gift cards or as statement credits. Plus, you may be given some time from the date you closed your card to use your rewards.
Before you close your credit card, we would recommend calling your credit card issuer to learn about their rewards policy to make sure you are on the safe side and won't lose your rewards or at least have time to redeem or transfer them.
