Credit card users often save their points, miles and cash back for years with the hope of redeeming them for their well-deserved rewards. Yet in the back of their minds is the fear that their rewards simply won’t be there when the time comes.
Sadly, there are several ways that credit card rewards can fail to materialize. Here are five of the most common pitfalls, and how to prevent it from happening to you.
1. Expiration
Many airline frequent flier programs have expiration dates. For example, if American AAdvantage miles aren’t earned or used at least once in any 18-month period, the miles are lost.
How to keep this from happening to you: Keep track of all your loyalty points using a website such as Award Wallet. Although some airlines block these sites from accessing customers’ frequent flier information, American Airlines recently announced that it would again allow members to track their program using Award Wallet.
2. Inactivity
Like airline expiration policies, some credit card programs will take away your rewards if you don’t continue to use the card. For instance, the NFL Extra Points card from Barclaycard will close accounts of cardholders who do not make a charge for six consecutive months.
How to keep this from happening to you: Cardholders need to be careful to scrutinize the fine print of their award programs to look for issues like this. If your card has an inactivity clause, you could set up an automatic recurring payment such as a cellphone bill so the card won’t be closed.
3. Late Payments
Some credit cards have instituted terms that withhold rewards when the cardholder makes a late payment.
How to keep this from happening to you: Missing out on rewards is just one of several good reasons why you should never pay your credit card bill late. To avoid this, set up regular electronic payments through your bank or the card issuer.
4. Account Closures
When the card issuer operates the rewards program, cardholders will usually forfeit rewards when their account is closed for any reason. This includes customers canceling their credit card as well as banks that close delinquent accounts. For example, the Costco True Earnings Card from American Express issues reward vouchers to customers once a year in February, but cardholders who cancel their card before then will not receive their annual rewards.
How to keep this from happening to you: If you need to close a credit card account, make sure to redeem all of your rewards in bank programs. Obviously, you should avoid becoming delinquent in your payments, but if you fear that your card issuer might close your account for any reason, be sure to cash out your rewards as soon as possible. Also keep in mind that many credit cards issue rewards to a third-party program such as an airline or hotel chain, and customers’ balances may still be safe when they close their credit card account.