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The Danger Of Stockpiling Credit Card Rewards

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The Danger Of Stockpiling Credit Card Rewards

The prospect of earning credit card rewards can be very exciting. People often earn these rewards over time with the hope of redeeming them for an aspirational award such as an expensive flight or a luxury hotel stay. Yet too often, these credit card users are ultimately disappointed at some point before they can redeem these awards. In fact, there are three reasons why stockpiling rewards can lead to disappointment.

Bank Reward Forfeiture

Nearly every card issuer that offers rewards in its own proprietary system has a clause that allows them to confiscate cardholder’s rewards if the customer’s account is not in good standing or closed. For example, if a customer misses a payment, their account will not be in good standing. Their rewards can be frozen and their account subject to closure. Upon closure of their account, their balances will be forfeited. For example, the Costco True Earnings card from American Express distributes its rewards each year in February. If a cardholder account is not open and in good standing at that time, all of the rewards accumulated over the last year will be lost.

Travel Reward Expiration

To avoid the problem of bank reward forfeiture, cardholders can use co-branded cards that offer reward points and miles that are issued by a third party. These types of products include airline and hotel cards, as well as most other cards that offer rewards in the name of a company that is not the card issuer. In fact, the possibility of bank reward forfeiture can be avoided simply by transferring reward points to the program’s third party partners such as airlines and hotels. Yet even when bank reward forfeiture is avoided, another problem that reward card users can face is the expiration of airline miles and hotel points. Most programs have an expiration policy that dictates that after 12-18 months of inactivity, after which members lose their points.

What To Do If your Points Are Lost

For cardholders who find out too late that their points have expired or have been forfeited, there are still some options. Some banks and travel companies are sensitive to these kind of complaints and will consider reinstatement when members make their case. For example, airline miles can be reinstated when a customer proves that he or she should have earned points from partner activity that was not credited. Obviously, a bank is going to want to make sure that the cardholder’s account is active and in good standing before returning the customer’s points.

Of course, the easiest way to keep points from expiring is to use a credit card to generate activity, and keep accounts in good standing. By taking the time to learn and understand the terms and conditions related to rewards forfeiture and expiration, reward card users can be assured that their awards will be there when the time comes.

Editor's Note: This content is not provided by Citi. Any opinions, analyses, reviews or recommendations expressed here are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by the Citi or any of the other companies whose products are featured in this content.

About the author

Jason Steele

Jason Steele is a freelance journalist specializing in personal finance and travel and is recognized as an expert in credit cards. He is a regular contributor to many of the top personal finance sites such as Wise Bread and Money Talks News. His work has been frequently carried on mainstream news outlets such as MSN Money, Yahoo, Finance, and Business insider.

Jason lives in Denver Colorado with his wife and two daughters.

– has written 350 posts.

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