Redeem Rewards Before Closing Credit Card Accounts Or You’ll Automatically Forfeit Them

Many credit card customers are getting notices that their accounts are being closed as of a certain date.

Millions of other credit cardholders have gotten notices of changing terms, and are calling in to close their accounts.

Be aware that the software interface that is used by the credit card call center reps to answer your questions and  process requests to close accounts is not programmed to make sure that you do not lose your rewards.

So, should you receive notice that your account is being closed, or should you decide to close a credit card account, then redeem your rewards BEFORE your account actually closes, or your rewards will, automatically, be forfeited.

CUSTOMERS LOSING HUNDREDS IN REWARDS

You would not believe how many customers lose hundreds of dollars in redemptions in this way, simply because, when you call in, agents are under no obligation to give you a “heads up” on your need to redeem your rewards before your account is closed.  

Neither is the information that would inform an agent that your account is “a rewards account” immediately available. There is, in fact, nothing to alert the agent. There is nothing that comes across the agent’s screen that says ”This is a rewards account so warn the customer that rewards will be lost on closing.”

That DOES NOT APPEAR on the screen. If the call center rep sees it at all, he discovers it after the closing request has been made, and then it’s too late. Neither he nor you have any recourse at that point. You’ve lost the rewards, and that’s that.

So I recommend that you postpone putting any rewards account into “closing” until those rewards are redeemed.

REDEEM REWARDS BEFORE CLOSING

Make sure you actually have that airline ticket purchased or the cash back in hand before you put the account in closing. Do not be in the position of still waiting for the rewards redemption when  the account is closed.

Plus, most customers don’t realize it, but most credit card companies will allow cash back redemption of rewards on closing, even if the account is not normally entitled to cash back rewards.

The credit card company for which I work does, however, have a minimum amount of rewards that you must have in your balance before you are entitled to a cash credit.

AGENTS NOT REQUIRED TO EXPLAIN 

Yet, let me emphasize this: no one is required to tell you about any of these little details.

So, should an agent be nice enough to give you a “heads up” about the fact that you are going to lose your rewards if you do not redeem them before closing your account, appreciate it.

If the account is being closed under an “opt out” (a program that is available when the the credit card company is increasing your rates) there will be special procedures and provisions for redeeming rewards and specific cut off times as to when all this needs to happen. Find out the dates for those cut offs, and make sure that your redemptions are completed before the account is closed or restricted.

If there are no rewards to be redeemed, even though I am not required to do so, I advise customers to close credit card accounts themselves after the credit is pulled, and not wait for the credit card company to do it.

Why? There is no guarantee that the closing of your account will be coded correctly.

So you want to be sure that the closing of your account is coded as “closed voluntarily” and not leave it to chance or a glitch in the software.

A mistake like that can have long-lasting negative affects on your ability to get future credit and, more likely than not, you won’t even know that it’s happened, or that it’s causing a problem.