What's happening
This bill requires credit card companies to provide a 90-day grace period for redeeming reward points after account changes and prohibits point expiration.
Why it matters
Protects consumers from sudden loss of rewards. By mandating at least 90 days to redeem points after account changes or closure, the bill ensures customers have a fair chance to use accumulated rewards, even if their account status unexpectedly changes.
Prevents point expiration. The prohibition on the expiration of credit card points means consumers can save and use their rewards without worrying about losing them over time, increasing the actual value and flexibility of rewards programs.
Limits issuer power over consumer agreements. Credit card companies cannot require customers to waive these new protections, making the rights non-negotiable and enhancing legal security for cardholders.
Exempts cases of fraud or misuse. The law carves out exceptions for accounts involved in fraud or misuse, meaning these protections won’t apply if a cardholder has violated program rules, preserving issuers’ ability to address abuse.
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Who cares
Headline styles
Protect Credit Card Points
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to consumer affairs and protection
- Delivered to assembly
- Passed senateVote 60–0
- Ordered to third reading cal.809
- Reported and committed to rules
- Print number 7104a
- Amend and recommit to consumer protection
- Referred to consumer protection
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Protect Credit Card Points
In Assembly Committee · Consumer Affairs And Protection · Sponsor Michael DenDekker
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
7104--A
IN SENATE (Prefiled)
January 8, 2020
Introduced by Sens. MAYER, JACKSON, KRUEGER, MYRIE, SALAZAR -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the general business law, in relation to establishing a set grace period for the use of credit card reward points
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The general business law is amended by adding a new section 520-e to read as follows:
§ 520-e. Grace period for use of credit card reward points. 1. As used in this section, the following terms shall have the following meanings:
(a) "credit card points" or "points" shall mean denominated units that can be accumulated in an account in connection with a credit card reward, loyalty, or other incentive program, often referred to as points or for certain travel-related rewards as miles, which are redeemable, fungible, or otherwise exchangeable, in whole or in part, for rewards;
(b) "rewards" shall mean goods, services, cash, merchant-specific gift cards, travel benefits, or one or more other things of value; and
(c) "rewards program" shall mean any agreement between a holder and an issuer regarding points related to an account.
2. If any credit card account or rewards program is modified, cancelled, closed or terminated, the holder must receive notice from the issuer of such cancellation, closure, termination or modification as soon as possible, and in any event within fifteen days of such cancellation, closure, termination or modification. Beginning with the date on which notice is sent, the holder shall have ninety days to redeem, exchange, or otherwise use any credit card points that the holder accumulated at the time of such modification, cancellation, closure, or termination as permitted under the terms of the agreement or agreements between the holder and the issuer which is servicing the applicable
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14416-04-0
S. 7104--A 2
credit card account or related rewards program, subject to the availability of rewards.
3. It shall be unlawful for any agreement between an issuer and a holder, or any rewards program, to provide for the expiration of credit card points.
4. The provisions of subdivision two of this section shall not apply in the case of fraud by the holder with respect to the credit card account or any related rewards program, or misuse by the holder of the credit card account or any related rewards program.
5. Any agreement entered into by a holder that waives, limits or disclaims the rights set forth in this section shall be void as contrary to public policy.
§ 2. This act shall take effect one year after it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the general business law, in relation to establishing a set grace period for the use of credit card reward points
Purpose or general idea of bill
The purpose of this legislation is to protect credit card holders from the unmerited cancellation of their reward points by creating a grace period for the use of reward points after the closing of a credit card account.
Summary of provisions
Section 1 adds a new section 520-e to the general business law to:
(1) define certain terms related to credit card rewards programs;
(2) require that notice be given to credit card holders within fifteen days of the cancellation, closure, termination or modification of a credit card account and establishes a 90 day grace period (beginning on the day such notice is sent) for the use of accumulated credit card points, except in the case of fraud or misuse of the credit card or related awards program by the credit card holder;
(3) prohibit agreements that provide for the expiration of credit card points;
(4) creates an exemption for fraud or misuse by the card holder; and
(5) prohibit agreements that waive, limit, or disclaim the rights set forth in the new section 520-e.
Section 2 provides the effective date.
Justification
According to the Consumer Financial Protection Bureau, points, loyalty programs, and other rewards are among the most important factors for consumers when selecting a credit card, and more than 60% of all new credit card accounts were for rewards cards
(see https://www.consumerfinance.gov/data-research/research-reports/ the-consumercredit-market-2019/).
However, credit card rewards programs are often governed by agreements that are not transparent to consumers. One particular provision in many credit card agreements allows the credit card issuer to cancel all accu- mulated rewards points or other rewards benefits upon the closure of the credit card account, without affording the credit card holder any oppor- tunity to use accumulated points. This becomes a consumer protection issue when the issuer unilaterally closes such an account. Card agree- ments allow for point cancellation without a grace period in connection with certain account closures, for example, if a holder fails to make a payment, as well as for unspecified reasons that fall under catch-all
clauses such as if the issuer believes the holder may be unwilling or unable to pay their debts on time.
Credit card holders often save up their points, so the cancellation of such points can result in substantial loss of value for the holder. In one instance, a cardholder had just reached one million points (worth approximately $50,000) which they had saved up for use during their retirement, when the issuer closed their account and cancelled all their points.
Rewards points are understood by consumers to be part of the bargain when they sign up for a credit card, regardless of how they may be described in a card agreement. Canceling points without notice and with- out a grace period to use them constitutes a failure by the issuer to honor consumers' understanding of that bargain. Although issuers provide for a grace period in some situations, consumers should always have the ability to use their accumulated points after the closure of their account so long as they have not engaged in fraudulent or other improper activities relating to that card or the related rewards program.
Prior legislative history
New bill.
Fiscal implications
None.
Effective date
This act shall take effect one year after it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.