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Can I use credit card rewards points prior to filing bankruptcy?
Anonymous7 views3 answers
I have quite a few rewards points on my credit card, enough to cash out for 3 round trip airline flights. Recently I have been considering bankruptcy. I don't want it to be considered fraud if I cash these out. Is this something that could impact a bankruptcy?
These points aren't usually transferable to someone else, so I wouldn't have an problem if you were my client as long as you weren't continuing to use the card to make additional purchases. Hope this perspective helps!
Generally, Reward Points are given only for payments made. So in my opinion there should not be any problem using the points. If you do file I would suggest you wait at least 90 days after you use the miles, just to be safe.
I agree with both attorneys.
Keep in mind that once you file for bankruptcy, it could be an issue whether a credit card company will honor frequent flyer points or other rewards if you have an open balance on your card. So you might want to make sure you cash them out or transfer them.
Another point -- because the value of an individual point is minimal, certainly a fraction of a penny, I am unaware of a trustee compelling an individual to liquidate reward points and turn over an equivalent value to an estate.
