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New Protection Laws for NY Credit Card Customers in Effect


A new state law is now in effect that protects credit card holders from losing earned credit card rewards. Credit card companies must take additional steps to protect consumers from losing accrued points when rewards programs are modified or terminated.

Pursuant to the new law, credit card issuers have 45 days to provide notice to cardholders when any existing credit card account or rewards program is canceled or closed, or modified in a way that is less favorable to the consumer. This includes any change that eliminates or reduces the value of a consumer’s points, makes it harder to accumulate points, limits rewards availability, or otherwise diminishes the value of the rewards program. From the day the credit card issuer sends this notice, consumers have 90 days to redeem their accrued points or rewards in accordance with the program’s original terms and conditions. While consumers often cash in their rewards before closing their accounts, the law requires a grace period after any account is closed.

Many consumers strategically save up credit card rewards, like points, airline “miles,” and cash-back rewards to fund trips, vacations, large purchases, or other goals. Unexpected termination of rewards programs or unfavorable modifications can cost consumers who save their points the equivalent of hundreds and, in some cases even thousands of dollars in lost value. Even when a consumer voluntarily decides to close their credit card account, additional time to redeem points can prove valuable for consumers to make the most of their points.

Tips For Using Credit Card Rewards:

Make the most of your points: Many rewards programs give multiple options for consumers to redeem points, like cashback, airline “miles,” or “pay with points” options. Compare the value of each potential reward and pick the option that provides the highest dollar value per point. 

Review reward expiration policies: While most credit card rewards do not expire as long as you keep your credit card account open, certain airline and hotel reward “miles” and points expire after 12 to 36 months. Read the terms and conditions of any rewards card to understand the expiration policy. Even if the terms provide for the expiration of points in some circumstances, remember that the credit card company cannot deny consumers a 90-day grace period to redeem points after modifying or ending a reward program. 

Avoid becoming delinquent on your account: Losing credit card rewards is only one aspect of the negative impact that making late payments can have on your financial wellbeing. Most credit card issuers require consumers to maintain their accounts in good standing with on-time payments to access points. Making purchases to gain rewards can be tempting, but never spend more than you can afford just to earn points or rewards.

Close accounts strategically: If you decide you need to close a credit card account, plan to redeem all your points before the end of your 90-day grace period. In some cases, you may also be able to transfer the points to a spouse or another card in your name.

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