A new state law is in effect that protects credit card holders from losing earned rewards.
As of December 10, credit card companies must take additional steps to protect consumers from losing accrued points when rewards programs are modified or terminated.
Secretary of State Robert Rodriguez said, “With holiday shopping in full swing, many consumers are using their credit cards to rack up rewards under the assumption they can be redeemed at any time. But that’s not always the case. This new law will protect consumers by guaranteeing them a minimum grace period to use those rewards.”
Pursuant to the new law, credit card issuers have 45 days to provide notice to cardholders when any existing credit card account or rewards program is cancelled or closed or modified in a way that is less favorable to the consumer. This includes any change that eliminates or reduces the value of a consumer’s points, makes it harder to accumulate points, limits rewards availability, or otherwise diminishes the value of the rewards program.
From the day the credit card issuer sends this notice, consumers have 90 days to redeem their accrued points or rewards in accordance with the program’s original terms and conditions. While consumers often cash in their rewards before closing their accounts, the law requires a grace period after any account is closed.
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