Did you know that card issuers reserve the right to change the terms of their rewards program? It’s true and this includes cash-back cards. What’s more, cash rewards can expire over time, which is all the more reason to redeem your cash as soon as you can. Once you do, you can always begin building once more. Then, should the card’s terms change or your rewards-time expire, you’ll be none the worse off.
Defend Yourself
The best defense against any surprises though is to familiarize yourself with a card’s terms and conditions. If anything seems curious, contact Customer Service to ask for clarification. Cash back credit cards and reward credit cards can be great, but they also take a commitment on your side (to use it). Before you enter into such a relationship, it’s definitely wise to make sure you know exactly how things work and whether or not there’s any fine print to be aware of (like expiration dates).
Some card issuers will require that you request your cash be redeemed. If not, the reward will simply grow in your account and while you may think this is similar to a savings account, think again. There are instances when your cash rewards could in fact expire. Evaporate! The whole point of cash back cards is the bonus in the end. Thus, imagine not being able to claim that reward because of some technicality. To protect yourself, be mindful of your threshold and when your cash is ready to be redeemed.
Rolling Away
Be aware too that your expiration date could be rolling. If your card is based on points and you need to reach a certain threshold in order to qualify for a rate (say 5% at $5,000), then the chances are there’s also a time limit. If for instance, the limit is two years, then this means that your points only count for two calendar years, counting back from today’s date. Although you may qualify for 5% now, it may revert back to a lower percentage tomorrow if your current two years suddenly doesn’t meet the minimum (e.g. $5,000).
Just think: if you accumulated 1,000 points in the first three months of your card and another 1,000 in the next 21 months, then once the third year rolls around, your points and cash reward will be cut in half. In an instant, you could find yourself in a lower tier, again needing to work your way up. What’s more, if you failed to redeem your cash reward prior to this, it could be lost. This is definitely something to keep in mind when choosing a cash-back card, as it dictates how much you need to spend and how often.
Inactivity=Zero
The second way forfeiture could happen ties into expiration dates as well: inactivity on a card for an extended period of time could lead to forfeit. If you enroll in a cash back program, the issuer is going to want you to keep the card active. A “penalty” for not doing so could be that your sitting cash is voided!
To protect yourself from such “fine print” and consequent penalties though is to be aware of any and all terms and conditions pertaining to your card. If you do so, you’ll be an informed consumer and cardholder and consequently, your card’s potential will likely be maximized. Not minimized.
Or worse still: forfeited away.
