American Express Airline Fee Credits Take a Big Hit

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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:

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.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. @ Gary — It’s a race to the bottom. Citi Prestige is once again superior to AMEX Plat. Our household will be closing 2 AMEX Plat, 2 AMEX Gold, and 2 Hilton Aspire cards, not out of spite but because these cards are now non-competitive. That is $2,500 lost annual feed so that AMEX can save $1,000 per year on gift cards. I am betting AMEX is going to regret this decision.

  2. Does they still work for purchasing 500 mile upgrades?

    This is how I’ve used them the past 2 years.

  3. @Gene, Agree on the first two but Hilton Aspire with the resort credit, and free night comes pretty close to the fee without the travel credit,no?

  4. Has anyone tried having a phone agent charge $25 of an airfare purchase to the AmEx then the remainder to another card?

  5. I agree with you – this has really hit the value proposition for AMEX. There are still ways to convert those fees into cash, but those methods require jumping through more hoops and loops to achieve. I very much would prefer if AMEX dumps the Uber credits and instead offer $200 credit on all travel (airline, hotel, Uber, etc.). How they have things set up with so many restrictions makes those credits a pain to use.

    @Mike H I believe you have 30 days from date your annual fee hits to call AMEX and get a full refund otherwise its prorated. If AMEX refuses to prorate your annual fee for whatever reason I think you can downgrade to a no fee card and get reimbursed a prorated amount. That is what happened when I downgraded my Hilton Surpass/Ascend to the no fee Hilton card after getting the Aspire.

  6. These $450+ annual fee cards don’t make that much sense to me. In my own line of work, I’ve learned that the simpler I make the message, the better. Arcane, convoluted, and cumbersome never resonates with anybody.

    These $450+ annual fee cards for the most part fall under “arcane, convoluted, and cumbersome.” Paying a $450+ annual fee on a card that gives me $200 in credits that may or may not be easy for me to use does absolutely nothing for me, and comes with a confusing message. Why not just whack $200 off the fee and skip the credits? I get what they think is in in for them, but that’s not what I’m concerned about. I’m concerned about *me*. I just see expensive fee with a weird smorgasbord of “benefits” (that may or may not be an actual benefit) and skip it because it makes no sense. And there’s not incentive for me to talk myself into paying $450.

  7. @ Dan — They are worth the sign up bonuses, then worthless.

    @ beachfan — True, we will probably keep one Aspire card, maybe two, as the free weekend nights are more valuable to me when I have two.

  8. Southwest allows three different payment methods when paying online. Historically, using an Amex with a fee credit for an even number (say, $50) has triggered the credit. That potentially seems likely to continue working?

  9. I find the Uber and dining credits incredibly easy to use, and I use the ancillary benefits of the Platinum heavily (mainly SkyClubs during work travel), so these airline credits were never that meaningful to me. I find the best way to use the credits are on your secondary airline – which for me is American. AAdmirals Club single day access during work trips, 500 mile upgrades if you are a Gold, bags, etc.

    I’ve said this on other blogs but to me this is crying over spilled milk – if gift cards were the main reason people had these cards, I feel like they weren’t getting maximum value out of them anyway.

  10. When bloggers have been posting how to beat the system. Of course it eventually ends ! I’m pretty sure the point of the program was to cover incidentals.

  11. American Airlines did not work for me a couple of weeks ago, after you said it worked again. Oh well.

  12. Can’t wait for the AMEX financials to see if the RATs have created their own sinking ship.

  13. @Gary – is it still possible to use the credit for AS flights under $100?

    If there are other uses for the credits (for any airline) beyond bags, 500 mile stickers, or on-board food, that would be an excellent post.

  14. Still useful to pick main cabin extra on economy award tickets. I can get all the value I need just from that.

  15. @Doug – wouldn’t matter, the way it’s coded on your Amex billing statement would show a flight. For example this past weekend I purchased an award flight with SW and paid for the taxes on my platinum. The $5.60 charge on my card shows as ticket purchase and shows the entire routing, ticket number and name of passenger in the description. There’s a lot of expanded detail. Too soon to say if it will be reimbursed but I doubt it for the reasons stated.

    @Gary – “cash rules everything around me except when other asset classes provide higher risk adjusted yields.” The new “C.R.E.A.M.” song? haha

  16. Going to cancel both gold and plat after I redeem the points. Was fun while it lasted.

    If they were going to make this change, they should have made it agnostic so that it applied to all airlines. None of this “pick one airline, make sure you’ll never have status with it” kruft.

  17. I cancelled my Plat card last year. Not only the Gift Cards don’t work, but now you can’t use the Centurion Lounges except on the outbound and only 3 hours prior (which is really like 2 hours since you have to go to the gate). Plus they hardly have any of ’em anyway. And the cuts on the Priority card. It used to be you could use it to get into most USA airline lounges, but that’s long gone except for Delta if you are flying them. Plus they raised the prices. And added some mostly worthless other benefits.

    I still have the gold and the Hilton Aspire, plus the Amex Business Blue. The Business Blue is the one I use the most. So far I’m really impressed with the Aspire; I think that has the best benefits. If I don’t use the air credit it’s not so bad because of the free hotel night and the other stuff you get, like Diamond status. My husband just got an Aspire too. He still has a Plat card, but looks like we’ll probably be dropping that one. We hardly use these cards anymore.

  18. Yesterday I chatted with an online agent and received the following information about these credits:
    Eligible charges include but are not limited to:
    • Airline fee charge transactions billed after airline selection
    • Airport lounge day passes and annual memberships
    • Change Fees
    • Checked baggage fees
    • Early check in fees
    • In flight amenity fees (beverages, food, pillows, blankets, and so on)
    • In flight entertainment fees excluding wireless internet
    • Overweight and oversized bags
    • Pet flight Fees
    • Phone Reservation fees
    • Seat assignment fee **
    • Standalone cancellation fees (fee billed directly to card)
    • Unaccompanied minor fee

    **but apparently not SW early boarding fee per earlier conversation with Amex

    Ineligible charges include:
    • Airline fee charge transactions billed to the account prior to airline seletion
    • Airline tickets
    • Award ticket fees
    • Charges process by Merchants other than the airline the Card Member has selected (for example, in-flight Internet service providers such as Go Go)
    • Charges made by airline partners (for example, Card Member purchases tickets on selected airline, Delta, but purchases food on an Air France flight)
    • Duty free purchase
    • Frequent Flyer purchase
    • Gift cards issued by airlines
    • Point transfer fees
    • Trip insurance /baggage insurance
    • Ticket upgrades (including American Airlines Upgrade Stickers
    • Travel Agent Fees

  19. Gary do you think there is a chance the credits will come back? Have you talked to American Express about this?

  20. @Neil. How does get credited for an airline “Change fee” when the airline charges the “Change fee” back into the newly rebooked flight? (Transaction will show the associated tix number).

  21. @Alliw
    I haven’t experienced this yet, but I am sure that if you save the details from the changes, you could submit that to American Express and request the credit. Amex depends on what the airlines provide, but if you can give them supporting information they should be able to work with you. It’s worth a try.

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