Cash back sits in your card account until you redeem it, and closing the card can wipe it out. Some issuers also take it after months without activity or when you fall behind on payments. Redeem the balance before you close or downgrade a card, and take it as a statement credit or deposit for full value.
A growing rewards balance can feel like savings, but the issuer’s terms decide what happens to it. The Consumer Financial Protection Bureau reported in 2023 that cardholders lose hundreds of millions of dollars’ worth of rewards every year.
Capital One says you can lose unredeemed rewards when you close the account or when it isn’t in good standing, which covers being behind on payments. U.S. Bank cancels Cash+ rewards once either side closes the account, and its Smartly card lets rewards expire after 12 straight statement cycles with no purchase, balance, or rewards activity.
Discover is an exception. When an account closes, it mails a check or credits the account for whatever rewards are left.
Redeem in the rewards section of your issuer’s app or website. A statement credit or a deposit to your bank account pays full value at most issuers, while other routes can pay less. Citi’s Double Cash points are worth a cent apiece as a statement credit or deposit but only about 0.8 cent each when spent at Amazon, according to NerdWallet. Minimums mostly apply to checks and gift cards, and Bank of America’s checks start at $25.
Some cards pay full value through a single route. Fidelity’s Rewards Visa is worth 2% back only when its points go into an eligible Fidelity account, and it can make that deposit automatically every month. If your card offers automatic redemption, turn it on, and the balance stays small.
Redeem before you close a card, and before you downgrade one unless the issuer confirms the balance moves to the new card. Do the same before closing a bank account your rewards deposit into.
A rewards balance earns nothing while it sits. Check yours today and redeem it.
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