As unromantic as it sounds, credit cards aren’t meant to last forever. Breakups happen.
Maybe it’s because the bank refuses to waive the annual fee. Maybe you signed up to get a gift, and don’t use the card anymore. Maybe the bank has drastically changed terms and conditions or benefits of the card.
Whatever the reason, you may wonder “What happens to my points when I cancel a card?”
The answer depends on whether or not your credit card points are “pooled”.
What is pooling and which banks do it?
Pooling simply means that all your credit card points earned with a given bank go into a central pool. The opposite of pooling is “siloing”, where credit card points are kept in silos, tagged to individual cards. The diagram below illustrates the difference:
For example, a customer with Bank A would be able to convert 12,000 points to miles at one go, with one conversion fee. A customer with Bank B would have to convert his points twice (and pay two conversion fees) – once for Card 1, and again for Card 2.
The table below shows which banks pool credit card points:
|Pools||Does not Pool|
– American Express^
|– Standard Chartered|
– Bank of China
*The OCBC VOYAGE earns VOYAGE Miles, which do not pool with OCBC$
^Refers to Platinum cards earning Membership Rewards points; cobrand KrisFlyer cards automatically credit miles to KrisFlyer account
What impact does points pooling have on cancelling a card?
If your bank pools your points, then cancelling a card has no impact on your total points balance. For example, if I hold a UOB Preferred Platinum Visa and a UOB PRVI Miles Mastercard and I cancel the latter, I still keep whatever UNI$ I’ve earned from it (because the UNI$ are already in a centralized pool).
Of course, this doesn’t apply if the given card is my last card with the bank. If I only hold one UOB card and I cancel it, I’ll forfeit all my UNI$ (because there’s no more pool!)
If your bank doesn’t pool your points, cancelling a card means losing all the points on that card. For example, if I hold a Citi Rewards Visa and a Citi Prestige and I cancel the latter, I will lose whatever Citi ThankYou points I’ve earned from it. To avoid that, I’ll need to cash them out before I cancel the card.
So the general rule is: if the bank pools points, cancel your card without fear of losing them. If the bank does not pool points, be sure to convert them before you cancel.
The one exception to this rule is DBS. Although DBS pools points for the purposes of redemption, the points are still tagged to specific cards. This means that cancelling a given card causes you to lose the points tagged to it.
Avoiding orphan points balances
If you’re trying to cash out your points before cancelling a card, you may run into what’s known as the “orphan points” problem.
Orphan points arise because banks specify minimum conversion amounts for transfers to frequent flyer programs.
- SCB: 2,500 SCB points (1,000 miles) for the Visa Infinite Card, 3,500 SCB points (1,015 miles) for the SCB Rewards+ card
- Citibank: 25,000 Thank You Points (10,000 miles) for the Citi Prestige & Citi Rewards card, 10,000 Citi Miles for the Citi PremierMiles card
- HSBC: 5,000 HSBC Points (2,000 miles)
- DBS: 5,000 DBS points (10,000 miles)
Imagine you want to cancel your Citibank Rewards Visa and have 20,000 ThankYou Points in your account. That’s the equivalent of 8,000 miles, no small change by any means.
However, you won’t be able to convert them into miles because you’ve not hit the minimum conversion block. Your only option, in that case, is to use your points for cash rebates or shopping vouchers, which represents inferior value compared to miles.
Therefore, do a quick audit of your points before cancelling a card. If you’re close to hitting a minimum block, divert a bit more spending on it to reach that threshold. Unless you’re very precise, some orphan points are inevitable, but the fewer you end up with, the better.
None of the above scenarios apply to you if you hold a cobrand card like the AMEX KrisFlyer Ascend or the KrisFlyer UOB Credit Card. Cobrand cards credit miles directly to your KrisFlyer account, and cancelling them has no impact on the miles already in KrisFlyer.
It may also be a good idea to read the terms and conditions of any sign-up offer when applying for a card. Banks reserve the right in some cases to claw back bonus points should you cancel a new card within a certain period. If those points have already been converted to frequent flyer miles, they can charge you the cash equivalent. Most clawback periods are at most 12 months, so if you’re past this period, there should be no issues.
Read these next:
Best 6 Credit Cards For Overseas Spending
Most Popular Credit Cards In Singapore 2019
How To Redeem Miles For Friends And Family
7 Ways To Earn More Miles With Everyday Expenses
I Have 19 Credit Cards, But There’s Just 3 I Would Recommend Anyone To Have
By Aaron Wong
Aaron started The MileLion to help people travel better for less and impress “chiobu”. He was 50% successful. This is his story.