Finance

Watching Your Credit Card Points Vanish? Here’s Why They’re Disappearing (Trap 5)

April 14, 2025
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Note: This is part of our series on credit card rewards traps. Check the end of this article for links to more pitfalls.

Think you’re safe from breakage? Think again.

Think Your Credit Card Rewards Are Safe? Banks Count on You Forgetting (Trap 4)

Welcome to the vanishing act—where your points can disappear or lose value faster than last week’s leftovers. Banks know how to quietly drain your points before you even notice.


This is the heartbreaker of the rewards world: you diligently accumulate miles or points, and then one day you find they’ve expired or are suddenly worth less than before. Card issuers and their travel partners (airlines, hotels) are highly motivated to devalue rewards over time. Why? To reduce their financial liability and nudge you to spend more. If too many people stockpile points and redeem for expensive rewards, it hurts the company’s bottom line. So they implement expiration dates and sneakily devalue point currencies to ensure they’re not on the hook for as much free value in the future.

How it works:

Many airline and hotel programs (often linked to travel credit cards) have rules like “points expire after 18 or 24 months of inactivity.” That means if you don’t earn or redeem something within that period, your balance could be wiped out. Some issuers of bank points have similar policies, especially if you close the account. One real-life tale of woe: A frequent flyer transferred a huge chunk of credit card points into Southwest Airlines miles and earned a companion pass, only to discover later that over 100,000 miles had vanished because his account was deemed “inactive” for two years . He had used some miles in that period, but Southwest’s policy counted only earning new miles as activity, not spending them, a subtlety he misunderstood. No email warning, no grace – poof, the points were gone . Stories like this are surprisingly common (if you’ve ever heard a friend or relative lament, “I lost all my miles!” you know the pain).

Even if your points don’t outright expire, they can lose value through devaluation. This is when an airline or bank suddenly requires more points for the same flight or hotel night than before. For example, that flight to Hawaii that used to cost 40,000 miles now costs 60,000. Your points didn’t disappear, but their purchasing power dropped 33%. Airlines have been notorious for this, especially with the rise of dynamic award pricing – prices in points fluctuate with cash prices and demand, often trending ever upward. Credit card companies sometimes devalue their proprietary points or alter transfer ratios to partners. They may also remove or devalue the complimentary perks that come with cards (e.g., downgrading lounge access benefits or free checked bags, etc.). Essentially, they move the goalposts after you’ve earned your rewards .

Why it’s hard to detect:

Devaluation is often done in semi-stealth mode. You might get an email with the subject “Updates to our Rewards Program Terms” which buries the bad news inside. Or you hear bloggers complaining that “XYZ Airlines gutted their award chart” – but if you’re not tuned in, you won’t know until the day you try to book and discover your points don’t go as far. Expiration can catch you by surprise if you’re not aware of the rules or if life simply got in the way of using the points. Military deployment, illness, pandemic travel pauses – all sorts of reasons can cause inactivity, and unless the company has a heart (many extended expirations during COVID-19, for example), your rewards may lapse. 15% of rewards cardholders said they’ve had points or miles expire before they could use them , and that’s just those who know it happened. Some might not even realize they lost value because it’s not always announced loudly.

Real-world backdrop: Regulators have noticed this problem. The CFPB’s 2024 report spotlighted how companies “reduce the value of rewards already earned” by upping redemption requirements and not protecting customers when partners (like airlines/hotels) change their rules . The U.S. Department of Transportation even launched a probe into airline rewards programs, noting that many Americans treat points like part of their savings, yet “unlike a bank account, these rewards are controlled by a company that can change their value unilaterally.” They’re looking at how airlines devalue miles, add blackout dates, or impose new restrictions without fair warning . In plain language, if you’ve been saving points for a dream vacation, an airline can pull a fast one – require more points or tack on fees – and your “savings” shrink overnight.

Who suffers most:

Frequent travelers and rewards enthusiasts ironically feel this the most, because they’re the ones with large stashes of points to lose. A road-warrior business traveler might have a million miles that get devalued by a policy change – a huge hidden loss. Retirees who save up points for a big once-in-a-lifetime trip could find their carefully accumulated cache isn’t enough when they’re finally ready to use it (or worse, health issues prevent travel and the points expire unused). Even low-income users chasing cashback can face devaluation if, say, a card changes its rewards structure from a flat 2% to tiered (making it harder to earn) or devalues the points when converting to cash. College students and newbies might get burned by not realizing that closing a card can forfeit any unused rewards – for instance, some banks stipulate that if you cancel the card, you forfeit any cash back not yet redeemed. One reader shared how they lost 62,000 points by canceling a premium card without realizing the transferred points would expire in 60 days . These policies are often tucked away in fine print, so it’s very easy to overlook.

Empathy alert:

It’s genuinely upsetting to lose hard-earned rewards. I’ve heard the sighs of exasperation from folks who feel cheated. You upheld your end – you used the card faithfully, accrued the points – but when it came time to enjoy the fruits, the rules changed. It feels unfair because, frankly, it is. My advice: always read notices from your reward programs. Use your points regularly (the phrase “earn ’em and burn ’em” exists for a reason). And don’t be afraid to push back politely with the issuer if something vanishes; as seen in that $15k points case, sometimes they can make it right . Just know the game is tilted in the issuer’s favor by design.

Keep uncovering the bank’s tricks by exploring more reward traps down below.