It all depends on whether the points in question are part of an in-house points program operated by the credit card’s issuing institution, or a third-party loyalty program associated with a co-branded credit card.
In the former case, you'll likely lose your points when you cancel the card unless you use them up or transfer them out. In the latter case, your points are safely kept in the loyalty program, so you can cancel your credit card without worry.
Examples of in-house points programs include:
American Express Membership Rewards, which is used by several Amex credit cards
RBC Rewards (or “Avion” as it’s more popularly known), which is used by the RBC Visa Infinite Avion et al.
CIBC Rewards (or “Aventura”), which is used by the CIBC Aventura Visa Infinite et al.
Scotia Rewards, which is used by the Scotiabank Gold American Express et al.
As you can see, each program is owned and operated by the same institution that issues the credit cards through which you earn points. In these cases, your points account is typically associated with one particular credit card, and if you were to cancel that card, your points will typically be nullified as well unless you were to transfer them out or use them up beforehand.
On the other hand, you have third-party programs that partner up with a financial institution in order to issue points-earning credit cards. Examples of this include:
Aeroplan, which has miles-earning cards with TD, CIBC, and American Express
The Marriott loyalty program, which has personal and business co-branded cards with Amex
British Airways Avios and WestJet Rewards, for which RBC issues a co-branded Visa
Alaska Airlines Mileage Plan and Best Western Rewards, both of which partner with MBNA
For these loyalty programs and their co-branded credit cards, any bonus points, as well as the points you earn from everyday spending, are typically transferred to the third-party account with every monthly statement.
If you were to cancel the credit card, nothing would happen to the points you’ve already earned, since they’re now sitting pretty within your loyalty program’s points balance and not associated with your credit card or financial institution in any way.
More on Keeping Your Points Alive
Of the proprietary programs operated by Canadian financial institutions, American Express Membership Rewards is no doubt the most powerful. Many people cycle through several cards within the Amex MR family before accumulating enough points for a redemption, and therefore require a way to keep their points alive when it’s time to cancel a card and reapply in a few months.
With Amex, this step is exceedingly simple: as long as you currently hold another MR-earning card, you can ask for the points balances to be consolidated to that other account before you cancel your existing card.
This can be done either via the Secure Message feature on the Amex website, or over the phone. Secure Messages are convenient, but calling tends to get the job done quicker, and you can typically get your points consolidated and your card cancelled in the same call.
The other banks’ points programs operate in a similar fashion. Points can typically be combined across credit cards – for example, I’ve had no trouble combining CIBC Aventura points between the personal Aventura Visa Infinite and an Aventura Visa for Business.
If you do go ahead and cancel your card without moving the points out, one thing to note is that these programs typically give you a grace period after cancelling your credit card to use up your points, before you lose them for good. RBC Rewards and TD Rewards provide you with a 90-day window to use up your points, while CIBC Rewards and Scotia Rewards give you a 60-day window.
Lastly, keep in mind that the rule of thumb as described above doesn’t necessarily apply to other perks associated with a credit card, such as Priority Pass membership or companion vouchers. Indeed, when you cancel an Amex Platinum, your Priority Pass membership ends immediately, and when you cancel a WestJet RBC MasterCard, your companion voucher is removed from your WestJet Rewards account if it hasn’t already been redeemed.
Last updated 17 November 2018. Any questions? Contact me.