Some credit card issuers offer reward points that benefit people who frequently use their credit cards, making these credit cards worth your while. Whether you earn points, cashback rewards or miles, every dollar you spend will generate a bonus that you can use as you please.
However, accumulating points takes time, and while you’re watching them add up, you might find that you miss a credit card payment along the way. This possibility begs the question, “Do you lose reward points if you miss a payment?”
Reasons your rewards points may be jeopardized
Credit card issuers can revoke existing points or prevent you from earning more for a few reasons. From missed payments to bankruptcy filings, here’s what you should know about the reasons as to why your rewards points might be jeopardized.
Late or missed payments
Missing or late credit card payments often result in late fees and drop in your credit score. If you miss enough payments, your interest rate might even rise as a consequence. But did you know that a late payment on a credit card could even pause or force you to forfeit your reward points?
For instance, American Express is renowned for reclaiming existing points when card members miss a payment. Chase Bank has a slightly more forgiving policy, which results in the simple suspension of cardholders using or earning points as a result of a late credit card payment.
Meanwhile, a missed payment at Citi may cause you to lose your ability to redeem all of the points that you already earned on your account. Each of these major credit card companies offers people a way to get their points back under these circumstances, such as paying a fee or getting your account up to date.
You will usually have to contact the company directly if you want to reinstate your points afterwards. However, it’s worth noting that most card issuers will revoke your points once you’re severely delinquent, not just for a singular late payment.
Your account is inactive
If you don’t use your account for a few months, the issuer may revoke your reward points or close your account completely. Some issuers will offer a grace period that is usually between one and three months, which lets you spend your points after your account has already been closed. However, even if you don’t use your card regularly, making it a point to use your card every few months might help you improve your credit score in the long run.
You’ve closed your account
It’s always wise to use your reward points before you close your credit cards. Otherwise, you will risk losing any rewards you’ve racked up over the years. If you don’t have a balance to redeem, you may be able to transfer your points or put them towards a gift card instead.
You’ve filed for bankruptcy
Most issuers revoke rewards points when you file for bankruptcy, even if you don’t include that specific card as part of your filing. However, if you’re at the point of filing for bankruptcy, it is highly likely that you have already lost your points as a result of your missed payments.
You’ve returned a purchase
Unfortunately, some customers have abused reward programs by making purchases and then returning the items in order to get those points. To prevent this from happening, issuers tend to remove reward points that were earned on transactions made with the credit card that were then reversed or refunded.
You’ve violated the reward program terms
When you take out a credit card, you likely received a document that detailed the terms and conditions of that credit card. While it’s a lot of information to go through, it’s essential that you read every line of this information because card issuers take their terms and conditions seriously, as should you.
Violating the terms and conditions can result in various penalties, including fees, higher interest rates or a sudden end to your promotional APR. The penalty for violating reward card policies can be just as severe.
If you attempt to buy and sell points or churn cards, the issuer will likely revoke your points immediately and then close your account. Churning involves opening as many cards as possible to redeem the bonuses, only to then close them right away.
Your reward points expired
Nowadays, many credit card issuers promote their rewards programs on the basis that their points don’t expire. However, that’s not always the case. Some credit card issuers set limits, such as a length of six months or two years, and you must use your points during that time. If you fail to redeem them before the time limit is up, they might just go away completely.
The terms and conditions changes
Remember those terms and conditions? Unfortunately, the fine print of most credit card issuer’s conditions permits them to alter or revoke the entire rewards programs at any time.
However, your issuer will likely warn you if they decide to dispose of the reward program altogether, giving you more time to take advantage of the points you accumulated.
Other things that might happen when you miss a credit payment
Missing a payment has far greater consequences than simply losing your reward points altogether. Failing to make up for that missed payment within the grace period can have drastic impacts on your financial health.
Your credit score could drop
Your payment history is the single largest component of your credit score. Making a late payment on your credit card or missing it altogether can drastically decrease your score. Once that black mark hits your credit report, it will remain there for up to seven years. That said, the impact it will have on your credit score will typically fade within one to two years.
You might be charged high interest rates or fees
The vast majority of card issuers charge fees for late or missed payments, which increases the costs associated with you having a credit card. If you miss too many payments, this behavior can even cause them to hike your interest rates for a few months, which is essentially known as a penalty APR.
Don’t lose reward points by missing a payment!
A late credit card payment isn’t the end of the world but it isn’t ideal either. Rather than risk your points and your credit score, make it a habit to stay on top of your payments instead.
You can set up autopay with your bank, repeat payments with your credit card app or even set a monthly alarm on your digital calendar. Whatever it takes, prioritize on-time payments every month.
Why did my cash rewards disappear?
Credit card reward points can disappear for a few reasons. This could happen as the result of missed payments, late payments, changes to your card’s terms of conditions, violations of the card issuer’s terms of conditions or account closures. The issuer may also revoke your points if you file for bankruptcy or return purchases that earned rewards.
What happens if I miss a credit card payment by one day?
Credit cards aren’t required to give you a grace period during which you can make up your missed payments without dealing with any penalties. However, most credit cards offer a grace period of around 10 to 15 days, meaning that missing a payment that goes unpaid for around 24 hours isn’t usually a big deal. Just try not to make this behavior a habit.
Can you lose credit card rewards?
Yes. It is possible to lose credit card rewards in several ways, including making a late payment, violating the terms and conditions or filing for bankruptcy.