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7 Ways You Can Lose Your Credit Card Rewards Points

NEW YORK ( LowCards.com) -- If you pay off your credit card balance on time every month, using a credit card can actually make you money. That's because of the rewards that come with over half of the credit cards on the market.

The rewards come in many popular forms, such as cash back, airline miles or points. But they can also be things such as merchandise from your favorite NFL team, NASCAR souvenirs and discounts at bookstores or home improvement stores.

But consumers should realize they don't "own" rewards points, and there are ways to lose them. That can be very costly if you have accumulated a significant amount.

Here are seven ways to lose your credit card rewards and how you can protect them.

1. Miss a payment. New reward points are added to your total after you make your monthly payment. If you fail to make this payment each month, you will not get those rewards. Some issuers may withhold rewards if you don't make payments on time. You may be able to reinstate them after the payment is made, but that reinstatement fee can be costly. Late payments can happen to anyone from time to time. To avoid this, set up a payment alert or regular electronic payments through your bank.

2. Break the cardholder agreement. If you do something that violates the credit card agreement, you could forfeit your rewards.

3. You close the account. If you close your account, you will lose your rewards. The rewards don't transfer or cash out with you, so use the rewards before closing the card.

4. Issuer closes the account. If the card issuer closes the account for any reason, the cardholder loses the rewards.

5. The credit card company changes the rewards program. Your credit card company has the power to change your rewards program at any time, and this could set you back. They will send a notice before the changes, so pay attention to the notices that you get in the mail. For example, Southwest Airlines (LUV) informed members this week that its Rapid Rewards frequent-flier program is increasing the number of points needed to get the cheapest tickets. The "Wanna Get Away" reward flight bookings made on or after March 31 will require 70 points per dollar -- a 16.7% increase from the 60 points per dollar needed currently.

6. Inactivity. You can lose rewards on some cards if you don't use the card within a certain time. If you plan to use the card only sporadically, read the fine print to learn what could happen to your rewards. Some airline rewards expire after 18 months of inactivity. Make a small purchase each month to keep your account active, or set up a recurring payment on the card.

7. Returned purchase. If you return a certain purchase, you forfeit the rewards and they will be deducted from your account.

Protect your points by using them. Letting your points accumulate forever carries the risk of losing them. Have a plan for your rewards and find the way to make them work for you.

Bill Hardekopf is chief executive of LowCards.com, which compares and rates more than 1,000 credit cards. He is the co-author of "The Credit Card Guidebook."

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