“Keep Your Credit Card Active: Strategies to Preserve Your Rewards”

Maximizing Your Credit Card Rewards: A Comprehensive Guide

At O1ne Mortgage, we prioritize your financial well-being and aim to provide you with the best advice to make informed decisions. Credit card rewards can be a valuable asset, offering cash back, gift cards, travel opportunities, and more. However, understanding how to maximize these rewards and avoid losing them is crucial. In this blog, we will explore the nuances of credit card rewards, how to keep them active, and ways to prevent forfeiture.

Do Credit Card Rewards Expire?

Credit card rewards programs offer various ways to redeem your rewards, but you might worry about losing them if you don’t use your card frequently or are saving up your rewards. Generally, rewards from cash back credit cards or points and miles programs do not expire as long as your account remains open and in good standing. However, there are exceptions based on the card issuer and the type of rewards.

For instance, airline and hotel credit cards may have different expiration policies. Some frequent-flier and hotel loyalty programs may have rewards that expire after 12 to 24 months, although the clock can reset each time you earn or redeem points or miles. It’s essential to understand the specific terms of your rewards program to avoid any surprises.

Ways You Can Lose Your Credit Card Rewards

Even if your credit card rewards program does not have an expiration policy, there are other ways you can lose your hard-earned rewards:

Closing Your Account: If you close your account, you may lose access to your rewards balance. Some card issuers may offer a grace period to use up any unredeemed rewards, but this is not always the case. For airline and hotel rewards, which are held with an external rewards program, you can usually close those cards without losing your points or miles.
Missing a Payment: Failing to pay the minimum amount due on your card can result in your card issuer not crediting your rewards balance for that billing cycle. In some cases, you can recover those rewards by paying your bill and a reinstatement fee.
Card Issuer Closes Your Account: If you are delinquent, violate your cardholder agreement, or your account is inactive, your card issuer may close your account, causing you to forfeit any rewards you’ve earned. This can sometimes happen without notice.
Making a Return: If you return an item purchased with your card, the card issuer will typically claw back the reward earned on that purchase.
Rewards Program Cancellation: In rare cases, a card issuer may decide to end its rewards program. They may provide a grace period to redeem the rewards you’ve earned before the program closure.

How to Keep Your Credit Card Active

One way to lose rewards is if your card issuer closes your account due to inactivity. Each issuer defines inactivity differently, ranging from a few consecutive months to several years with no purchases. In most cases, it’s about 12 months. In addition to forfeiting rewards, having your account closed due to inactivity can negatively affect your credit score. Here are a couple of ways to keep your account open:

Make a Purchase Every Few Months: Set a reminder to use the card for a small purchase every few months, then pay it off as soon as the transaction posts or at the end of the billing cycle.
Put a Small Recurring Charge on the Card: Consider putting a small recurring charge, such as a streaming subscription, on the card. You can also set up automatic payments to avoid remembering to log in and pay manually.

Note that some card issuers may allow you to reopen an account closed due to inactivity, but you may not get your rewards back.

The Bottom Line

If you’re concerned about losing your credit card rewards, review the rewards program’s terms and conditions to understand the different ways you can forfeit them. If the program has an expiration policy, find out what you can do to extend it. Since many credit card rewards don’t expire unless your account gets closed or you become delinquent, make it a priority to keep your accounts active and in good standing to avoid missing out on the benefits of your cash back, points, or miles.

At O1ne Mortgage, we are committed to helping you make the most of your financial opportunities. For any mortgage service needs, feel free to call us at 213-732-3074. Our team of experts is here to assist you in achieving your financial goals.