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3 Things You’ll Lose When You Cancel Your Card Early (#2 Is Vital!)

3 Things You’ll Lose When You Cancel Your Card Early (#2 Is Vital!)

Million Mile Secrets3 Things You’ll Lose When You Cancel Your Card Early (#2 Is Vital!)Million Mile Secrets Team

We devote thousands of hours of research to help you get Big Travel with Small Money. You support us by signing-up for credit cards through partner links which earn us a commission. Here’s our full Advertising Policy.

For most folks, earning lucrative bonuses is the best way to get Big Travel with Small Money.  But what happens to the award trips you already booked with miles and points when you cancel the credit card?

3 Things Youll Lose Out On When You Cancel Your Card Early 2 Is Vital
You Won’t Lose the IHG Points You Earned With the Chase IHG Card If You Cancel It. This Goes for All Airline and Hotel Cards!

Million Mile Secret Agent Wassim asked:

I applied for the IHG® Rewards Club Select Credit Card 2 months ago.  I got the bonus and booked 2 nights using points for June 2018.  If I cancel the card now, will that cancel my booking?  How would the same situation apply to the Chase Hyatt card and Delta AMEX cards?

You will NOT lose any points earned from hotel or airline credit cards if you cancel the card.  But that is NOT the case if you cancel a bank points credit card.  In that situation, you could lose your points.

But before you cancel your card, Wassim, consider whether or not it’s best for your situation to keep or close the credit card!

Should You Close Your Card?

If you cancel your Chase IHG card, you will not lose the points you have earned.  And any awards you already booked will NOT be affected.

But if you cancel your card, you will lose the perks that came with it.  And if you cancel it right after earning the bonus, the banks definitely won’t like it.  Here’s what to consider before canceling your card.

1.   The Perks You’ll Lose

You’ll lose the Platinum elite status that comes with the Chase IHG card.  So if you were hoping to get a room upgrade on your stay, canceling the card will hurt your chances.  But if you already had elite status with IHG, this isn’t as important.

The Chase IHG card comes with a free night each year on your account anniversary.  This more than makes up for the $49 annual fee, which is why I keep it year after year.

3 Things Youll Lose Out On When You Cancel Your Card Early 2 Is Vital
You Can Use the Free Night From the Chase IHG Card at ANY IHG Hotel, Like the InterContinental Hong Kong! That’s Worth Much More Than the $49 Annual Fee

Similar benefits on the Chase Hyatt card could make it worth keeping.  It comes with a Category 1 to 4 hotel free night certificate each account anniversary, and only has a $75 annual fee.  Team member Harlan used his Hyatt free night at a $300 a night hotel in Austin last year, so it was definitely worth keeping for him.

Airline cards, like most of the Delta AMEX cards, come with perks like free checked bags.  Checked baggage fees can easily be $50 per round-trip!  Depending on how often you fly with Delta, that perk alone might make the card worth holding onto.

2.   Your Relationship With the Bank

Banks do NOT like it when you open a credit card and close it after earning the bonus.  Some banks, like AMEX, specifically say in their terms & conditions if you cancel or downgrade a card within 12 months of getting it, they can take away your bonus or freeze your account.

But even if you don’t lose your points, you could hurt your chances of earning a lucrative bonus in the future.  If banks see a lot of new credit card accounts on your credit report, they might be less likely to approve you for new cards.  This is especially true if the accounts were closed shortly after being opened.

3.   Your Credit Score

One factor of your credit score is the age of your accounts.  If you open lots of credit cards and close them in a few months you will lower the overall average age of your accounts.

This could have a negative impact on your overall credit score.  And hurt your chances of being approved for a credit card or loan, if your score drops below a certain threshold.  Plus, it’s easy to maintain a great credit score even if you have lots of cards!

Bottom Line

If you cancel a hotel or airline credit card, you will NOT lose the miles and points you have earned.  And it won’t affect any award flights or hotel stays you booked with those miles and points.

But you will lose the perks that come with the card.  Those benefits could make the card worth keeping year after year.  Also, it won’t help improve your relationship with the bank or your credit score if you open lots of credit cards and cancel them immediately after getting the bonus.

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Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

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You’ve already paid the annual fee for a whole year, so keep it for the year and make a note in your calendar to cancel at the anniversary if you want to. I have wanted to churn and burn only to find that be using the card I foInd it more valuable to keep it. Others I have decided to dump. For instance I don’t need 2 Southwest cards now that I have my Companion Pass, so I’ll dump one at the anniversary

Million Mile Secrets

Agreed, it’s a good idea to keep track of the annual fees and decide after ~11 months whether the card is worth keeping.

I see more risks with keeping cards open, such as:

– Increased chance of fraud on each account

– Annual fees

– Not being able to apply for the same card again, in many cases

– Not being approved for another card with same bank (sir, you already have $50,000 of credit available from us . . .)

Million Mile Secrets

These are all good things to consider as well.