Dec 18 (Reuters) - Credit card companies that devalue or

cancel the rewards points, cash back or miles that cardholders

have earned may be breaking the law, the top U.S. watchdog

agency for consumer finance warned on Wednesday.

In a policy circular, the U.S. Consumer Financial Protection

Bureau said prohibitions against unfair, deceptive and abusive

practices mean authorities may punish card issuers which slash

the value of such rewards based on fine print, hidden terms or

technical glitches.

The CFPB distributes such circulars to other agencies,

including state attorneys general and local regulators, that

enforce federal consumer financial laws.

As of 2022, three-quarters of all general-purpose credit

cards were rewards cards and many consumers choose which to

apply for and use based on the rewards offered, according to the

CFPB.

U.S. President-elect Donald Trump has yet to name someone to

run the CFPB next year but observers say the agency is virtually

assured to take a very different approach to enforcement and

regulation. Trump ally industrialist Elon Musk has called for

abolishing the agency.

Republican lawmakers have also demanded that financial

regulators cease issuing new regulations until Trump takes

office, a call the CFPB has not heeded.