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Protecting Your Points: New York’s Credit Card Reward and Loyalty Program Law Is Set to Take Effect


Just in time for the holiday shopping season, New York Senate Bill No. S133B takes effect on December 10, 2022. Last year, Governor Kathy Hochul signed the bill, which amends New York’s General Business Law to give consumers a set grace period to use their credit card reward points when certain changes (e.g., modification, cancellation, closure, or termination) are made to a “reward, loyalty, or other incentive program.”

Under the new law, credit card companies must “inform credit card holders within 45 days if their account or rewards program is modified, cancelled, closed or terminated. Unless the customer has engaged in fraud or misuse of the account, holders will then have 90 days to redeem or exchange their rewards points.”

The law defines “points” broadly, as “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[.]”

Credit card loyalty programs can be a significant factor in how consumers decide which credit card to use. According to a 2019 Consumer Financial Protection Bureau (CFPB) report, around half of consumers with subprime credit scores and two-thirds of those with near-prime credit scores make purchases on a rewards-based credit card; the more a customer understands how their reward program works, the more likely they are to spend.

Most credit card loyalty program agreements include provisions specifying that cardholders have no ownership rights in the points they earn through purchases with their cards and provide that the program can be modified and/or terminated, and points can expire, at any time and without notice.

The new law changes this in New York, however, and provides that neither the credit card company nor its customers can disclaim any rights, and any attempt to do so will be void as contrary to public policy. Therefore, credit card companies offering loyalty and reward programs that have not already done so should review their program terms closely for compliance.

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The authors thank Jay V. Prapaisilp, a law clerk in Venable’s Washington, DC office, for his assistance in writing this article.


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