One reason (of many) never to cancel a points card too soon!

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amex takes skymiles away

You can see by the screen grab above from that American Express took points away from my Skymiles account. Clearly 4 Skymiles is not something to be all too worried about. Unlike the generation before me who will stop and pick up a penny on the ground, I come from the generation that thinks that a penny saved is a waste of time (unless there are a lot of pennies involved that is)!

It is always good to keep in mind, no wait, to know that we do not own “our” points. Any of these programs can kick us out whenever they want and even cancel booked award tickets. There is a reason we are not taxed for our points, one is because they are not our points.

I want to be clear about the focus of this post and the Skymiles point deduction I was hit with. For us as Delta flyers, either AMEX or Delta can deduct points however they wish from our accounts and there is very little we can do about this.

So what are the big picture implications? There are many but let me start with the big ones. The first is about canceling a credit card too fast (if you want to that is) . I get emails all the time from readers who ask if they should cancel a card after say 4 or 6 months since they know they have to wait at least 365+ days to get a new AMEX card. I always say:

 “sure do that if you want to risk having your points taken back from you”?

Also the fact that doing this can have a very negative impact on going forward on collecting more points from cards. Personally I like the slow and steady approach. There are so many good offers we just don’t need to rush and take big risks.

There is more to this. Like what? As I talked about yesterday I get a ton of points each year by just calling and asking for them. I reap the biggest rewards from the cards that I  HOLD  long term and use often. Those cards I have not used much offer me little or no points. Now if I were to use a card very little and cancel quickly I am sure I would also get no offer to persuade me to remain a card member.

Then there is the next time you ask for credit from the same institution. Banks are using all sorts of new and creative ways to gauge if you are a good value to them as a member. If a bank sees both in your credit report and in their internal documents that you tend to sign up, cancel quickly, and then ask for another card, how likely are they to keep saying YES to you long term? You need to show you are giving value back to the bank.

Those of us who are in a position to enjoy the perks of the points game should always remember we are walking a fine line and never want to wake up one day to find the points we have worked so hard to amass are gone. – René

Delta SkyMiles® Credit Card
from American Express®
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  1. I know you have a post of what you can ask a credit card company to give you, but how do you go about asking it? You mentioned in this article that you ask for skymiles. How do you do that?

  2. It is so hard to do all these tricks with the CC. We had Delta Platinum for years and love it. However, would love to earn all these extra miles for buying things we need.
    Would it be possible to create a series of posts about your CC’s? For example, you would write – next week I am getting rid of “these” credit cards and going to get “those”. So, all the readers who are interested could follow you and be sure never forget to cancel or get a new card.
    PS: thank for the “asking for points” advice. I recently called my card (in the middle of the card year) and they gave me 15000 miles:) just cause I asked for the incentive:)))

  3. @Kate – txs for your comment. My best advice is use your phone. Almost all phones have a calendar. When you active a new card, put in a reminder 11 months from that date to call about that card. Then you will never forget! – Rene

  4. @Elliot – it was simply due to a fare change on a ticket and the reissue was at a lower price so I get less 2x bonus miles from my Delta Reserve card thus the net result was a negative bonus. But, the illustration makes the point that they can do this. The T&C states they can at both AMEX and Delta. This is rare but I sure do not want a reader hit by a big minus ever!

  5. so tough to follow..on one hand you advocate card rotation for maximizing welcome bonus’, but on the other, hold cards and be loyal. I am with @Kate here…new to the game and trying to get a game plan that works for me. Closing up a refi on the house here soon, so it is good that anything major where my excellent credit score is needed is out of the way first. DO you earn loyalty to each brand by holding one of that brands card while rotating others? I.e. I have been with AmEx Membership Rewards for a long time. Hold that and consistently use it to establish loyalty to AmEx to ensure approval every other year of a Delta AmEx with Welcome Bonus? THen do a similar thing with Chase?

    The part about using the miles before you cancel makes perfect sense and is well-received. I hadn’t thought about that. I am a casual miles hunter, so it is only about once every three years I can go on a big splurge with the family and use all my points. WIth that in mind, I would have the cards with the best welcome bonus on a 4-year rotation (hold card until points are used, then release it for 365 days before reapplying.

    Just need to make sure I have a well thought-out game plan before I hit “go” as my credit will take a hit from which recovery is long. Not to mention it becomes cash out of pocket now, and if the miles aren’t properly used, I lose that cash. Wife does not want any more magazine subscriptions around the house (that is what I do with the random miles I earn here and there from which I can do nothing…Froniter).

    When you come to San Diego on a MR, dinner is on me so long as I get to pick your brain.

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