Heads up, NY travelers and credit cardholders! The state of New York has prepared an early Christmas gift for you in 2023! 

The credit card reward points are finally getting some much-deserved attention from regulators. In a move that we hope will soon be followed by other states, The state of New York passed a law that extends protections to consumers who hold rewards credit cards.

At Wikimiles we have been advocating legislating consumer rights when it comes to rewards from the start, and we applaud NY state legislators and the governor. Without regulation, banks wrote cardholder agreements to give all of the rights to themselves and none at all to the consumer who actually gave the bank all the business in exchange for these rewards points.

The banks reserved the right to change the rules, taking away or devaluing the points, and even make changes that are retroactive.

How the New Law would Protect NY Credit Card Holders 

The senators cited data from the Consumer Financial Protection Bureau and emphasized that points, loyalty programs, and other rewards are some of the key factors consumers look for in choosing a credit card. They stated in the bill that some credit card rewards programs have agreements that are not transparent. Oftentimes, many of the key terms for rewards programs are surrounded by jargon, making it hard for consumers to understand the exact terms and conditions. 

The senators also referred to one particular instance where “a cardholder had just reached 1 million points (approximately USD 50,000), which he saved up for use during his retirement, when the issuer closed his account and cancelled all his points.” 

The new law that was signed by NY Governor Kathy Hochul, Senate Bill S133B, will provide NY residents a 90-day grace period to use their credit card rewards points in the event that their credit cards are closed or cancelled. 

The law requires that “notice be provided to credit card holders within forty-five days of the cancellation, closure, termination, or modification of a credit card account and establish a 90-day grace period (beginning on the day such notice is sent) for the use of accumulated credit card points.” 

The law also forbids credit card agreements that provide an expiration, forfeiture, or cancellation of travelers’ acquired points. 

3 Key Points from the New S133B Law 

1. Card issuers must send credit cardholders a notice within 15 days of account cancellation, closure, termination, or modification. 
2. Cardholders have 90 days to redeem, exchange, or use any credit card rewards as allowed under their agreement with the card issuer. The 90-day grace period must start on the date the notice is sent. 
3. Expiration, forfeiture, or cancellation of credit card rewards is prohibited. 

While the law aims to protect cardholders from any unlawful or unjust practices of credit card issuers, these rulings do not apply to customers who commit fraud or misuse their credit card account or any other rewards program. 

At present, the law only applies to cardholders who are residents of New York. If you reside outside New York and would like to cancel your credit card but you still have unused rewards, make sure to redeem or transfer them first. Some card issuers allow you to transfer rewards between similar cards from the same issuer, such as an Amex points card to another Amex points card. 

As NY Governor Hochul said, 

“This legislation will guarantee a season of good cheer in New York State by making sure that no New Yorker unfairly loses their accumulated credit card rewards.” 

This was a big win for consumers and frequent travellers in particular. This is a good holiday gift that we can all appreciate and that hopefully, other states will follow in the future! 

This new ruling will be put into effect one year after it’s signed into law.