Starting from December 10, 2023 for New York State residents: If a bank shuts down your credit card then the bank will need to give you 90 days to redeem your credit card rewards.
Section § 520-E from New York General Business Law (which is going into effect December 10, 2023) states the following:
“If any credit card account or rewards program is modified, canceled, closed or terminated, the holder must be provided notice from the issuer of such cancellation, closure, termination or modification as soon as possible, and in any event within forty-five days of such cancellation, closure, termination or modification. Beginning with the date on which notice is sent, the holder shall have ninety days to redeem, exchange, or otherwise use any credit card points that the holder accumulated at the time of such modification, cancellation, closure, or termination as permitted under the terms of the agreement or agreements between the holder and the issuer which is servicing the applicable credit card account or related rewards program, subject to the availability of rewards.”
Section 520-E forbids a credit card issuer from creating any separate agreement with a cardholder that waives the 90 day grace period.
Does this law only apply for New York residents?
Yes. This is a state law, not a federal law so only New York residents are protected.
Can banks limit the redemption options? For example, only allow me to redeem my points for cashback?
No. Section 520 -E does not allow a credit card issuer to “reduce rewards availability, limiting a holder’s use of points or the credit card account, otherwise diminishing the value of the rewards program” before the 90 day grace period.
What this whole “mishkabable” basically means is that they need to allow you to redeem your points the same way you were able to redeem them before the account was shut down.
What if I got shut down due to fraud or misuse of the program?
Unfortunately, if your account got shut down due to fraud or misuse then you’re no longer protected under section 520-E and your points can be fortified immediately after closure.
Why can't the bank always claim they shut me down due to misuse of the program?
Technically they can. But if you end up suing them in court then they will need to prove it. Bank’s legal departments usually try to stay out of trouble and don’t pick fights with you:)
What if I choose to close my account? Do I get 90 days?
If you close your account then you’re not protected under section 520-E. So make sure to redeem your points before you close your account.
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