Closing a credit card account -- whether voluntarily or due to inactivity -- commonly results in the forfeiture of any unredeemed cash back balance, even if that cash back was fully earned and vested at the time of closure, unless the balance is redeemed before the account closes.
This differs from how many cardholders assume rewards work: earning cash back doesn't create a permanent, portable balance independent of the account. It's typically tied to the specific account and disappears along with it if not redeemed first.
Missed payments can compound this risk in some card agreements, where a rewards forfeiture clause triggers loss of that billing cycle's accrued cash back specifically due to the missed payment -- a separate penalty from any late fee charged.
Some store-branded cash back cards are stricter still, expiring unredeemed rewards after just 12 months of account inactivity even without a full account closure, which is notably shorter than most bank-issued cards that don't expire rewards as long as the account remains open.
The straightforward way to avoid this risk entirely is redeeming any accrued cash back balance -- whether as a statement credit, direct deposit, or other option -- before initiating a voluntary account closure, and checking a specific card's terms for any inactivity-based expiration policy well before it would apply.
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Some card agreements include forfeiture clauses tied to missed payments, separate from the late fee itself -- check your specific card's terms.
Some store-branded cards expire rewards after a period of inactivity (often 12 months) even without a formal account closure.