I receive compensation for content and many links on this blog. You don’t have to use these links, but I am grateful to you if you do. American Express, Citibank, Chase, Capital One and other banks are advertising partners of this site. Any opinions expressed in this post are my own, and have not been reviewed, approved, or endorsed by my advertising partners. I do not write about all credit cards that are available -- instead focusing on miles, points, and cash back (and currencies that can be converted into the same).
Several banks offer credit cards that come with travel credits. There are various degrees of restrictions — from almost none at all (the credit is nearly as good as cash) to ultra-restrictive. These restrictions allow the card issuer to present a big headline benefit amount, while spending less to provide it (because the benefit isn’t as widely used, costs are lower due to breakage).
American Express has had the most restrictive rules, while being much more generous in practice.
- You’re only supposed to be able to use the credit for things like baggage fees, change fees, telephone booking fees, seat fees, lounge access and inflight purchases.
- And you have to pick one airline for the year to use your credit with and stick to that airline.
Historically though savvy customers have been able to purchase gift cards on their preferred airline and had the purchase automatically reimbursed with their fee credit. That’s money that can be used towards real airfare, and thus much closer to being worth face value.
This didn’t work with every airline, it came down to how a charge got coded and how the American Express system read the charge. Going into 2019 it was still possible to buy electronic gift cards in certain amounts online from American Airlines, Delta, and Southwest and have the charges reimbursed.
Back in February American Airlines stopped working due to a change in how their online gift cards were coded. Then they started working again. Since then these gift card purchases stopped getting reimbursed. So, too, have Delta and Southwest gift card purchases for those who selected one of those carriers as their preferred airline.
These airline fee credits are significant for (4) American Express products:
- The Platinum Card® from American Express: $200
- The Business Platinum® Card from American Express: $200
- American Express® Gold Card: $100
- Hilton Honors American Express Aspire Card: $250
I’ve had several readers contact me with their experiences. A couple have told me that they called American Express and received one-time adjustments as a courtesy. There have been plenty of data points in online forums. And recently several blogs have “called it” as well — American Express appears to no longer reimburse gift cards with their airline fee credit.
American Express said they wouldn’t from the get go, so it’s fair. They aren’t taking away a benefit they ever promised or even officially offered. Nonetheless, the ability to turn the fee credit into something approximating a cash equivalent (money to be used buying airline tickets) made the cost of the cards with those credits much more manageable. As they say, “cash rules everything around me except when other asset classes provide higher risk adjusted yields.”
What’s more effective August 1 Priority Pass cards provided by American Express will no longer include otherwise-participating airport restaurants.
Like Citi gutting travel protections and other card benefits I see this as saving American Express money providing rewards, actually a necessary step because the arms race between issuers has likely led the best rewards cards to become money losers.
Of course we should all evaluate whether or not a card makes sense based on the value we expect to get from it, and reducing the value of the airline fee credit will change the outcome out that calcuation for some readers.