[READER QUESTION] What to do with Discontinued Credit Cards?

We’ve been seeing lots of credit cards being discontinued in Canada over the last 12 months. The question is what do we do with these credit cards when we are in limbo. Most often, even though the credit card is discontinued from new applications, existing credit card holders can continue to use the credit card until they decide to cancel it.

Other times, they may discontinue the product all-together and all remaining cardholders will be automatically transferred to another credit card within the same financial institution.

When deciding whether to retain the credit card or not, I look at two main factors:

1) How often do you use it? If you feel that you are getting a good return, then keep it. For example, I still have the Capital One Aspire World MasterCard. I get 2 points for every $1 spent on all purchases. I was told by Capital One that they will not transfer existing credit card holders to another credit card, so I can keep it for as long as I want, which I plan to do, so long as the features and benefits remain the same.

2) How easy is it to cash out your rewards? If it was a cash back, it is pretty straightforward. You should be able to access your rewards fairly easily. However, if you earn points with the credit card, if it is the type of points that automatically transfer to a third party program, like the MBNA Choice Privileges MasterCard, you do not have to worry about points expiring on you because the points are already transferred to your loyalty program. Conversely, when it comes to the American Express TrueEarnings Card, you are earning cash back that you can only use at Costco. However, Costco stop taking American Express anyway, so there is no point keeping this credit card.

I am really hoping that the saying, “when one door closes, another door opens,” applies here. Hopefully this opens the door to a slew of new and more competitive credit cards.