Credit card points are not going away, at least not on any announced timeline, but their value is under steady pressure from two directions at once: pending federal legislation that could squeeze the fees funding rewards programs, and a constant drip of devaluations that quietly makes existing points worth less. No major issuer has said it plans to end rewards, and competition for cardholders keeps the programs alive. The real risk for most people is not that points vanish overnight. It is that they lose purchasing power while sitting unredeemed in an account.
The Legislation Everyone Is Watching
The most-discussed threat is the Credit Card Competition Act, a bipartisan bill originally introduced by Senators Dick Durbin and Roger Marshall. It targets banks with more than $100 billion in assets, requiring them to enable at least two unaffiliated card networks for processing transactions, including one outside the Visa and Mastercard ecosystem.1U.S. Senator Dick Durbin. Durbin, Marshall Reintroduce The Credit Card Competition Act Merchants could then route transactions on whichever network charged lower fees, breaking what sponsors call the Visa-Mastercard duopoly.
The bill has not passed. It was first introduced in 2022 and has been reintroduced in each subsequent Congress, most recently as S. 3623 in the 119th Congress.2Congress.gov. S.3623 – Credit Card Competition Act of 2026 Each round has triggered heavy lobbying on both sides and stalled. It remains a live threat rather than a dead proposal.
The concern, if it becomes law, is straightforward. Routing transactions to cheaper networks means banks collect less in interchange fees, and those fees fund the sign-up bonuses, elevated earning categories, and transfer partner relationships that make premium cards attractive. Whether reduced fee revenue would force issuers to scale back rewards, or whether competition for cardholders would keep programs intact, is genuinely unknown.
What Happened When Debit Card Fees Were Capped
There is one real-world test to look at. The Durbin Amendment, part of the Dodd-Frank Act, capped debit card interchange fees starting in 2011. Before the cap, debit cards had their own rewards programs. After the regulation took effect, banks covered by the rule significantly limited or eliminated debit card rewards.3Federal Register. Debit Card Interchange Fees and Routing The Federal Reserve’s own analysis noted that covered issuers had already cut those programs so deeply that further reductions were unlikely.
Covered banks also raised checking account fees, increased minimum balance requirements, and effectively pushed consumers toward credit cards, which were not subject to the cap. That is the shadow hanging over the current debate: if credit card interchange revenue gets squeezed next, there is no obvious third product to shift customers toward.
Credit cards are not debit cards, though. Interchange fees are substantially higher, interest charges give issuers a second revenue stream, and competition for the most profitable cardholders is fiercer. Banks might absorb some fee reduction rather than gut programs that attract their best customers. The precedent is concerning, not necessarily predictive.
Devaluations Are the Bigger Immediate Problem
Even without new legislation, points lose purchasing power through devaluation, and this is already happening every year. Issuers and their loyalty program partners regularly increase the number of points required for the same reward. The balance stays the same; it buys less.
Recent examples show the pace:
- Hilton Honors top-tier properties went from a maximum of 95,000 points per night to 250,000 points per night across three increases in roughly ten months during 2024 and 2025.
- Lufthansa Miles & More dropped its fixed award chart entirely in mid-2025, moving to variable pricing tied to ticket cost. Future devaluations become almost invisible because there is no published chart to compare against.
- Capital One’s transfer rate to Emirates dropped from 1:1 to 1,000:750 in early 2026, instantly cutting the value of Capital One miles for Emirates flights by 25%.
- Turkish Miles&Smiles raised partner domestic awards by 50% in late 2025 and added a new Hawaii zone with significantly higher costs.
The broader industry trend is away from fixed award charts and toward dynamic pricing, where the number of points required for a flight or hotel night moves with demand. A flight that cost 60,000 miles last Tuesday might cost 85,000 today, with no announcement to flag the change.
Issuers also drop or alter transfer partners. When a bank ends a relationship with an airline, the ability to move points at a favorable ratio disappears, usually with little fanfare and short notice.
How You Can Lose Points on Your Own Account
Program-wide changes aside, individual cardholders lose points through specific account-level triggers that are easy to overlook.
Inactivity and Expiration
Some programs expire points after a stretch of account inactivity, often between 12 and 36 months with no qualifying transaction. A qualifying transaction is usually any purchase, and sometimes a redemption. Capital One, Bank of America, and Wells Fargo, among others, advertise that rewards do not expire as long as the account is open. But this is an issuer-by-issuer decision, and many co-branded airline and hotel cards still follow the loyalty program’s own expiration rules. Check the terms for each card you hold.
Missed Payments and Delinquency
Falling behind on payments can freeze or permanently delete accumulated rewards. Most programs require the account to be in good standing for points to remain accessible. A single late payment can mean a late fee, a higher interest rate, and a vanished rewards balance all at once.
Account Closure
Closing a card without first redeeming or transferring your points is one of the most common ways people lose rewards. Some issuers offer a short grace period after closure, but the length varies and is not guaranteed. The safe move is to redeem or transfer everything before contacting the issuer to close the account. If the issuer closes your account, whether for suspected fraud, a terms violation, or a business decision to exit a product line, you typically lose the balance immediately with no recovery window.
Death of the Cardholder
Most programs treat points as non-transferable benefits that belong to the account, not the person. Some forfeit points on notification of death. Others allow an estate executor or trustee to redeem during a limited window. American Express, for example, allows estates to request points redemption by submitting a formal written request with documentation from the executor or trustee.4AMEX US. Managing Deceased Card Member Accounts A few programs convert the remaining balance to a statement credit against any outstanding balance. If you hold a large balance, confirm your issuer’s policy now.
The Legal Reality: Points Are Not Property
Cardholder agreements almost universally describe rewards points as a discretionary benefit, not as property you own. Issuers retain broad authority to modify earning rates, change redemption values, alter program rules, or terminate a rewards program entirely, often with limited advance notice.
Because points are not legal tender or personal property, they do not carry the protections money in a bank account does. If an issuer decides next month that your points are worth half what they were yesterday, a breach-of-contract claim is generally a non-starter, because the contract itself permits the change.
There is some counterweight. In December 2024, the Consumer Financial Protection Bureau issued Circular 2024-07, stating that the federal prohibition against unfair, deceptive, or abusive practices applies to credit card rewards programs.5Consumer Financial Protection Bureau. Consumer Financial Protection Circular 2024-07 – Design, Marketing, and Administration of Credit Card Rewards Programs The agency flagged three practices as potential violations: devaluing rewards consumers have already earned, revoking rewards based on buried or vague conditions disclosed only in fine print, and denying sign-up bonuses based on hidden conditions the consumer had no reasonable way to know about. The CFPB also warned that catch-all terms like “gaming” or “abuse,” especially when left to the issuer’s discretion, can make account closures and point revocations legally vulnerable. The circular also makes clear that an issuer can be held responsible for misleading reward expectations even when a third-party merchant partner is the one who reduced the benefit.
Whether that guidance survives shifting political priorities is an open question. CFPB enforcement posture changes with administrations, and circulars carry less weight than formal rules. Still, the circular gives consumers a legal foothold they did not previously have when challenging sudden devaluations of earned rewards.
Taxes on Rewards
One piece of good news: the IRS generally treats credit card rewards earned through spending as a rebate or discount on your purchases rather than as taxable income. Cash back, points, and miles from everyday card use do not need to be reported, and this treatment extends to most sign-up bonuses since those typically require meeting a spending threshold.
The exception involves rewards earned without spending. Referral bonuses for recommending a card to someone else are taxable income, because no purchase generated the reward. Bank account sign-up bonuses paid in cash are also taxable, treated as interest income. If taxable rewards from a single issuer reach $600 or more in a calendar year, the issuer should send you a Form 1099-MISC.
How to Protect the Points You Have
Legislative uncertainty, ongoing devaluations, and issuers’ legal right to change terms all point to the same conclusion: do not sit on a large points balance longer than necessary. A few practical moves follow from that.
- Redeem regularly. Points in your account are an unsecured, depreciating asset. If you have enough for a redemption you actually want, book it. Waiting for a better use often means watching the cost of that use climb.
- Watch for award chart and transfer ratio changes. When a program announces a partner change or a shift to dynamic pricing, that is your signal to use points at the current rate before the new one takes effect.
- Keep accounts active. Even a small purchase every few months prevents inactivity-based expiration on programs that still enforce it.
- Stay current on payments. A single missed payment can jeopardize your entire rewards balance on top of the late fee and credit score damage.
- Redeem before closing. Transfer or use every point before you call to cancel. Do not assume there will be a grace period.
- Spread balances across flexible programs. Transferable points programs that partner with multiple airlines and hotels give you more escape routes when any single partner devalues. Being locked into one airline’s miles concentrates the risk.
Points programs remain one of the most accessible ways to extract value from spending you were going to do anyway. The programs are not going away. The people who lose are the ones who treat points as a savings account and assume the value will still be there whenever they get around to using it.