Credit Card Rewards Won’t Last Forever

There has been some recent sad news in the rewards card industry. Specifically, Perkstreet, a rewards debit card, has had to close up shop. Luckily, the money in everyone’s account will remain untouched. However, the same isn’t true for the rewards people have earned on their accounts.

If Perkstreet customers had not requested to cash out their rewards prior to the announcement of Perkstreet closing, then their rewards have disappeared forever into the abyss. While some people may have had small rewards balances, I can easily imagine that some people had hundreds of dollars in rewards that they were saving for a particular goal. Those rewards are gone forever with no chance of getting them back.

While Perkstreet was a rewards debit card, rewards credit cards work in a very similar fashion. Most credit cards allow you to earn points which you can then transfer to other rewards programs, or you could turn your points in for check, statement credit or other form of cash back such as a gift card or a prize. Much like Perkstreet, credit cards can make your points vanish just as quickly without any warning.

Credit Cards Can Make Your Points Disappear

When you applied for you last rewards or cash back credit card did you take the time to read the terms and conditions that you agreed to in full? I didn’t think so. I have, and in every single rewards card I have there was a line saying something to the effect of the following:

*Credit Card Company Name* can make changes to the rewards program at any time with no notice. This includes making changes to any rewards balances that have been accumulated.

Essentially, every credit card agreement you sign likely says that they can take away any points you have earned and just make them disappear! This is exactly what happened to Perkstreet customers. Does it suck? Of course it does! But whose fault is it that you let the rewards sit in your account knowing that this could happen one day?

What You Can Do To Prevent This From Happening To You

The first thing you can do to prevent things like this from happening to you is read the fine print on everything you sign. If you did, you’d be aware your points could disappear for no reason at all. You’d also notice that you probably can’t redeem rewards if you’re delinquent on your account… but if that’s the case you have no business having a rewards credit card anyway.

The next thing you can do to prevent your rewards from disappearing is to use your credit card rewards as early as you can. Some people will save their rewards just because they like saving. If you don’t have a planned use for your points get your cash back or statement credit. If you’re accumulating points to use in a more valuable manner, such as transferring them to a partner program, just be aware of the fact that they might not be there when you expect them to be.

Do I See Big Banks Making Your Rewards Disappear?

I don’t see this happening with the big banks that issue credit cards such as Chase, Citi or American Express. These companies would have a huge backlash against them and they could lose a lot of business with their other product lines such as banking and mortgages. Perkstreet was a start up company and weren’t as stable as the big banks issuing the majority of credit cards.

However, if you’re signing up for cards with relatively new companies, small credit unions or banks you might want to be wary. I’m not saying they’ll fold up shop, but there is a bigger likelihood of something similar to what happened with Perkstreet happening to your issuer.

Are you worried about your credit card rewards? Did you have a Perkstreet rewards card?

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About Lance Cothern

Lance Cothern, a Certified Public Accountant (CPA) licensed in the Commonwealth of Virginia, is the founder of Money Manifesto. You can read more about him here or connect with him on Facebook, Twitter, Google+ or Pinterest.


  1. I’ve had this happen to me in other accounts, but never my credit card ones. However I have read that fine print before that says it can expire and it is always in the back on my mind. My strategy is to empty my rewards once per year at Christmas time for presents. That way the account gets used and I take a little break on the wallet with buying Christmas presents.

  2. I typically use our rewards right away. I’m always afraid that they’ll change the point values or rules.

  3. I’m not particularly worried about our rewards disappearing. From what I understand the writing was on the wall for Perkstreet and consumers were notified of rewards decreases in the months leading up to the bank’s failure. So far, we haven’t had any cards decrease rewards, though if we do, we’ll likely cash out and move on.

  4. I’d be livid if my credit card rewards disappeared into the abyss. Sure, it would be my fault for not reading the fine print and not using the points sooner, but it’s still bad business on the banks’ end to not honor rewards that have already been earned. Just paid half of my last credit card bill with rewards points. They’re a beautiful thing (while they last).

  5. Like you said I am not too worried about anything happening with the big banks. Best way to prevent losing anything is to make frequent transfers of your points.

  6. I didn’t realize that the accumulated Perkstreet rewards disappeared! We actually redeem our rewards frequently – since we use cashback cards, we just take statement credits as soon as we reach the minimum for the transfer.

  7. Mileage inflation is bound to happen: Delta is already making it more difficult to find a 25,000 mile flight.

    If merchants get successful in fighting credit card processing fees, it’ll definitely put a dent in the free rewards we can get!

  8. I tend to use my rewards as soon as I achieve the minimum for a trip. The typical ay you can lose your miles is if you drop the credit card.

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