New York passed new regulations today to protect credit card holders, with a particular focus on safeguarding credit card rewards points. The new rules will take effect on December 10. Two of the most important provisions are:
- If cashback terms or credit card benefits are changed or canceled, or if a credit card account is going to be closed, the card issuer must notify the cardholder 45 days in advance
- After receiving the notice, users have 90 days to redeem the points in their account
- News link
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.
This is a pretty good change, since it helps prevent situations where banks close accounts and simply confiscate the points. That said, credit card regulations vary from state to state, and some companies may even stop issuing cards in a particular state because of these rules, which is also pretty annoying.
