Sometimes, it may not be worth paying the credit card annual fee as the benefits does not justify the annual fee. If you decide to cancel your credit card, you should verify if you would lose your hard earned rewards.
Do you lose your Miles when you close a Credit card? The answer is – “It Depends on the type of credit card you are closing”
Co-Branded credit cards:
In general, You will not lose your Miles/Points when you close a co-branded credit card. However, you would lose all the benefits offered by the card like free checked bags, priority boarding , elite status etc. some of the co-branded credit cards
This is because the miles are transferred to the respective frequent flyer program at the end of every statement period and then the miles belong to you which can be redeemed from your frequent flyer account as long as your frequent flyer account remains active. For example: You will lose AAdvantage miles if there is no activity with in the past 18 months.
You should note that banks can pull back the miles if you violate any program terms or make a false purchase to receive the signup bonus.
Reward programs owned by Bank:
You will lose your Miles/Points when you close a credit card offering rewards owned by the bank. For example: You should redeem or transfer all your Membership Rewards points before closing your American Express Premier Rewards Gold card.
When you close a co-branded credit card (ex: Citi AAdvantage Platinum Select MasterCard) , You will not lose your Points/Miles. However, You would lose those miles per the frequent flyer program expiration rules. As an example, AAdvantage miles will expire if there is no account activity for 18 months.
But, When you close a credit offering reward points owned by bank, you will lose Points/Miles. You should redeem or transfer points before closing these credit cards. Some of the examples are American Express Premier Rewards Gold, Chase Sapphire preferred
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Editorial Note: Opinions, analysis and any calculations shown are authors alone. Information in this post is not reviewed, approved and endorsed by any airlines, frequent flyer programs or financial institution