Can Credit Card Reward Points Be Transferred Upon Death?
Credit card rewards are a great way to earn a bit from the money you already spend. As long as you pay your balance off in full and watch out for fees, credit card rewards are essentially a rebate for managing your money well.
Unfortunately, there are a few circumstances people don’t think about when earning credit card rewards. One of those circumstances is what happens to credit card rewards at death.
It’s easy to build up a hefty balance of credit card rewards. It makes sense to plan for what happens to them when you die, too. In order to do so, you need to know the rules of your rewards programs.
Do your credit card rewards, such as points and miles, die with you? Or can you pass them on to your heirs? Here’s what you need to know.
What Happens to Your Credit Card Rewards Upon Death?
Like most things in life, the answer to what happens to your credit card rewards upon death is it depends. Credit card rewards are complex. This is due to the wide variety of rewards available today.
Does Each Issuer Have Its Own Policy?
Each credit card issuer likely has its own rules. To make matters even more complicated, each credit card rewards program may have its own rules, too.
Even though two different credit cards may be issued by Chase, they may earn different rewards. One may earn Chase Ultimate Rewards points while the other earns Southwest Rapid Rewards points.
In this case, these cards earn two different types of rewards. Each is governed by its own rewards program. So how do you know what happens to your credit card rewards at death?
The first thing you can do is take a look at your credit card rewards program’s terms and conditions or program rules. These documents usually spell out how you can earn and redeem points. They also explain complex situations when your points may expire or be forfeited.
In some cases, these documents will also spell out what happens to your rewards if you die in clear terms.
For instance, some programs may require your heirs to provide a death certificate to redeem points after your death. Others may not require a death certificate or may not allow your heirs to redeem rewards at all.
In other cases, the rewards programs don’t spell out what happens in black and white. In these cases, you may have to read between the lines.
Almost every reward program’s terms and conditions will tell you what happens to your rewards when your account is closed. When you die, your account is closed. Therefore, these policies may tell you what happens to your points when you die, too.
Rules for Some Major Rewards Programs
Here are the rules for a couple of the bigger credit card rewards programs.
Chase Ultimate Rewards
In the Chase Ultimate Rewards rules and regulations document, here’s what they say about death:
“Any points accrued shall be permanently forfeited if your Account has been closed, or upon the Cardholder’s death.”
It goes even further and says:
“Points earned are not the property of the Cardholder and are not transferable, have no cash value, and cannot be used as payment of any obligation to us or our affiliates, except to the extent specifically enumerated in the Redemption Rules.”
This means:
You’d lose any Ultimate Rewards points you’ve earned as soon as your account is closed or if you die. Thankfully, there have been reports that this isn’t always what happens.
In practice, Chase seems to redeem Ultimate Rewards points as a statement credit when a cardholder dies. If the statement credit exceeds the balance owed, there will be a refund to the estate.
Even though there are multiple reports of Chase doing this, don’t count on it.
Always expect to get whatever the rewards program’s rules state, which in this case is nothing.
American Express Membership Rewards
American Express Membership Rewards is another popular rewards program that covers many credit cards. This program is a bit friendlier in its official program terms.
They state:
“If we cancel your Linked Card Account in the event of your death, your executor or personal representative may request to use the points in your program account in a one-time redemption by calling us.”
Essentially, this means any Membership Rewards points at death should be able to be redeemed by the executor of the estate in a one-time transaction.
Ways You Can Try to Preserve Your Credit Card Rewards
There are a few ways you can try to preserve your credit card rewards before you die. After all, planning ahead can help you avoid future headaches for your heirs.
Don’t hoard your points
The most obvious way to avoid having points disappear when you die is using them before you die.
Credit card rewards aren’t assets you want to pass on to your heirs like cash or investments are.
It can be easy to get in the habit of hoarding credit card points to wait for the perfect redemption options. After all, using points selectively can result in a huge value per point compared to the usual redemption options.
Even so, you should find ways to redeem your rewards if you find your point balances getting out of control. That way, you won’t end up with thousands of dollars worth of points potentially turning into nothing if you pass away.
The good news, obviously:
Using your points will give you a benefit today.
Whether you redeem them for cash back or book an amazing trip, you should get some sort of value you can enjoy today by redeeming your rewards.
In the case of cash back rewards, it makes even more sense to redeem them as you earn them. If your cash back can’t be redeemed any other way, it makes no sense to leave it sitting where a credit card company could devalue them.
Instead, redeem the cash rewards and put them in a bank account where you can earn interest on your cash.
Make sure a family member has access to your account
When a person dies, the entire world isn’t immediately notified. While banks and credit cards will find out your loved one has passed away and close their account, it takes time.
For this reason, a loved one that has access to your accounts could, in theory, redeem your points or other credit card rewards before the account gets shut down.
This would allow your family members to get value for the points rather than have them forfeited under some of the stricter programs’ rules.
Technically, this probably isn’t allowed as only you or your authorized users should have access to your account.
The bigger risk lies with someone else having access to your account while you’re alive.
If someone can redeem your credit card rewards, they can likely make other changes to your credit card accounts.
Instead, you could set up a way to notify your family members of your information after your death.
The key would be keeping all of the information up to date. This can be difficult for credit card enthusiasts that open and close several credit cards per year.
The other thing to consider is your family members aren’t likely to be thinking about your credit card rewards when you die. They’re going to be grieving your death.
Even if you have a detailed plan to have your family members log in to use your rewards before your account gets shut down, they may not have the ability or time to do so.
Instead, they may be dealing with more urgent tasks surrounding your death. Credit card rewards would likely be the last thing on their to do lists.
Only use programs with friendly death options
If you’re worried about losing your points when you die, only use programs that have an option to redeem points after your death.
Some programs, such as American Express’s Membership Rewards, allow redemption after your death. This way you can sleep better knowing your rewards won’t go to waste after you die.
The downside is you won’t be able to take advantage of the lucrative offers with other credit card rewards programs that don’t offer this feature.
Always Have a Plan
Your credit card points may or may not disappear after you die. The fate of your credit card rewards at death isn’t always certain.
Ultimately, it is up to the terms and conditions of the credit card rewards program and any customer service representative you speak to at the credit card companies.
To avoid losing credit card rewards at death, have a plan.
Ideally, you’ll spend your credit card points as you accumulate them.
As a backup plan:
Make sure your credit card rewards are mentioned in your estate planning just in case they can be passed on.
