Credit card points expiry and program changes in Canada: how to protect your rewards

Credit card points in Canada can be lost in four main ways: they expire under the program's rules, they are forfeited when you close the card or the account goes into default, they lose value when the program changes how many points a reward costs, or the program itself ends or changes partners. Cashback paid automatically avoids most of these risks; points held for years carry them all. The best protection is to read the program terms for expiry and closure rules, redeem regularly rather than hoarding, and never close a card before moving or using its points. Some provinces have rules on the expiry of rewards points, so check your provincial consumer protection office if points are cancelled.

This guide belongs to credit card mistakes and official sources. It describes common program patterns; the terms of your own program govern.

Four ways points disappear

Expiry and inactivity rules

Programs differ. Some points never expire while the card is open and in good standing; others expire after a set number of years or after a period without activity. Co-branded loyalty programs may have their own rules separate from the card. Check:

• whether points expire on a date, on inactivity or only on closure;
• what counts as activity (a purchase on the card, earning in the program, a redemption);
• whether the program sends a warning before expiry.

Provincial rules. Some provinces have legislated on rewards points expiry, particularly after public concern about time-based expiry in loyalty programs in the mid-2010s; Ontario, for example, amended its Consumer Protection Act, 2002 in 2016 so that consumer agreements may not make points expire due to the passage of time alone (s. 47.1). The details, exceptions and whether they cover credit card rewards vary. If your points were cancelled only because time passed, ask your provincial consumer protection office, or the Office de la protection du consommateur in Quebec, whether a rule applies. In Quebec, the OPC also has information on rewards and prepaid cards.

Closing, downgrading and default

• Closing the card. Many programs cancel unredeemed points when the account closes. Redeem first or confirm in writing that points can move to another card at the same issuer.
• Product change. Switching from a premium card to a no-fee card at the same issuer may move points, convert them to another program, or forfeit them. Ask before you switch.
• Annual cashback payouts. Some cashback cards pay once a year; closing the account before the payout date can forfeit the year's cashback under some terms.
• Default or fraud closure. Programs often allow points to be cancelled if the account is closed for non-payment or misuse.
• Death or separation. Programs have rules on whether points can be transferred to an estate or a spouse. Executors should ask the issuer early.

Devaluation: the slow loss

Suppose you earn 50,000 points a year and redeem a flight that costs 40,000 points. If the program raises that award to 50,000 points, each point is worth 20% less for that redemption. Points earned last year have lost value even though nothing expired.

Illustrative effect on card value. A card earning 45,000 points a year with a $120 fee nets $330 at 1 cent per point. After a 20% devaluation, at 0.8 cents, it nets $240. A no-fee 1.25% card on $24,000 of spending ($300) is now better. Re-run the rewards value calculator when a program changes.

Notice of changes

For banks, the Financial Consumer Protection Framework Regulations require at least 30 days' notice of most amendments to the credit card agreement. Rewards programs are often governed by separate program terms that the issuer can change under their own notice provisions. Read how the program says it will notify you, and keep copies of terms in force when you earned points if a dispute arises.

If a change seems to contradict what was promised when you applied, for example a welcome bonus or a guaranteed redemption value, use the issuer's complaint process and keep the original offer. Misleading advertising can also be raised with the FCAC for banks or with the Competition Bureau.

A protection routine

1. Once a year, at the annual fee date: check your points balance, expiry dates and current redemption values.
2. Redeem regularly for things you would buy anyway.
3. Before closing or changing a card, redeem or transfer.
4. Keep records of large balances: screenshots of balances and terms.
5. Prefer cashback for money you rely on; treat points as a bonus.
6. Value points conservatively when choosing a card; see cents per point.

Frequently asked questions

Can an issuer take back points I already earned?

Program terms usually allow points to be reversed for returned purchases, errors or misuse, and cancelled on closure. Taking points for other reasons may be challengeable; ask your provincial consumer protection office or complain to the issuer.

Are points property I own?

Program terms usually say points have no cash value and remain the program's property until redeemed. That is why closure and expiry rules matter.

Does cashback expire?

Cashback credited to your statement does not expire. Cashback that accumulates until a payout date or a redemption threshold can be subject to rules; read the terms.

Should I convert points to a partner program to "lock in" value?

Transfers are usually irreversible, and partner programs can change too. Transfer only for a specific redemption.

Sources

• Financial Consumer Agency of Canada — rewards programs and credit card agreements
• Office de la protection du consommateur — rewards and prepaid cards in Quebec
• Consumer Protection Ontario — consumer rights in Ontario
• Competition Bureau Canada — misleading advertising
• Justice Laws Website — Financial Consumer Protection Framework Regulations s. 67 (notice of amendments)