Spending airline fee credits during COVID lockdowns

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In my post “COVID Credit Card Enhancements Ultimate Guide,” I detailed all of the enhancements credit card issuers have made to their travel cards to persuade customers to keep those cards rather than cancel during this time of virus-induced stay-at-homedness.  Some of the enhancements are so good that, for many, it actually makes sense to sign up now for these cards rather than waiting until travel resumes.  This is especially true for Amex Platinum cards and Hilton cards.  See these posts for details:

In some cases, card issuers have made it easier to earn existing travel credits through non-travel activity.  Here’s a summary:

The above changes are great.  Sadly, though, there are many airline fee and travel credits with which we haven’t been given alternate options.  Here’s a partial list of cards that offer credits for all travel (besides the aforementioned Citi Prestige card):

  • Chase Sapphire Reserve: $300 annual travel credit
  • US Bank Altitude Reserve: $325 annual travel credit

And here’s a partial list of cards that that offer airline fee credits:

  • Amex Platinum Cards: $200 annual airline fee credit (with selected airline)
  • Amex Gold Card: $100 annual airline fee credit (with selected airline)
  • Amex Hilton Aspire: $250 annual airline fee credit (with selected airline)
  • Bank of America Premium Rewards: $100 annual airline fee credit
  • Chase Ritz Card: $300 annual airline fee credit
  • Chase Southwest Priority Card: $75 annual Southwest travel credit
  • Citi® Expedia®+ Voyager Card: $100 annual airline fee credit
  • CNB Crystal Visa Infinite: $350 annual airline fee credit
  • UBS Visa Infinite: $250 annual airline fee credit
  • UBS Visa Infinite Business: $350 annual airline fee credit

I wish the card issuers listed above would follow the lead set by Citibank with the Citi Prestige card.  Travel credits on the Prestige card were already easy to earn (since you could earn them with any travel, not just airline fees), but now they’re absurdly easy.  Cardholders have all of the rest of the year to earn their $250 in credits through purchases at supermarkets and restaurants.  Since the card already offers 5X at restaurants, earning the credit this year should be incredibly easy for all cardholders.

While it would be great if the other card issuers would copy Citi’s approach, I don’t think that’s likely to happen.  So, that made me wonder, can we take advantage of the travel industry’s relaxed change and cancellation policies in order to use up our travel credits?

It used to be common practice for people to use up their airline fee credits by buying airline gift cards.  For example, Amex Platinum cards offer $200 per year in airline incidental fees.  And if you used your Platinum card to buy a gift card from your selected airline, Amex would see that as an airline fee and reimburse the purchase.  Last year, though, they stopped crediting gift card purchases in that way.

While there are still options for earning airline fee credits for things that aren’t strictly fees, it’s more difficult than ever to do so without flying since Amex has started clawing back fee credits when they see that those fees were returned (if you cancelled the associated tickets, for example).  So, what can we do if we don’t have any near term travel plans?

Buy airline credits, indirectly, instead of gift cards

It occurs to me that one option is to use travel credits and/or travel fee credits to indirectly buy airline credits instead of airline gift cards.  Many airlines currently have generous change and cancellation policies for tickets purchased this month (and often into June).  In many cases, you can buy non-refundable tickets and later cancel them and get airline credit at full face value.  In some cases, this could be just as good as buying a gift card to that airline.

Here’s how it might work to indirectly buy airline credit:

  1. Buy a very cheap flight during the dates that the airline in question allows flexible cancellations.  If you have a card that offers general purpose travel statement credits, use that to pay.  You should then get reimbursed by the credit card company for paying for travel.  In some cases, cheap airfare looks like airline incidental fees to the credit card company, so you might have luck getting the statement credit if you pay with a card that only reimburses airline fees.
  2. After purchase, modify the reservation in order to add incidental fees.  In most cases, allowed incidental fees include checked baggage fees, itinerary change fees, pet flight fees, seat assignment fees, and more.  Pay with a card that reimburses airline incidental fees.  If using an Amex card, make sure that you have selected this airline as your preferred airline before doing this step.  IMPORTANT: Make sure that the add-on is refundable. For example, avoid paying for Southwest EarlyBird Check-In since that is explicitly not-refundable.
    [This step is needed only if your card rebates airline fees and not airline tickets]
  3. Later, cancel your flight.  The entire purchase price, including the add-on fees from step 2 should be rebated to you as airline credit.

Buy airline miles, indirectly

Air Canada and Southwest have announced that, for tickets meeting certain requirements, they will offer the option to get back miles instead of airline credit.  Air Canada will price their miles at 1.3 cents each.  For example, if you cancel a $130 ticket, you should be able to exchange it for 10,000 miles.  Southwest hasn’t yet announced the exchange rate of credits into miles (Southwest points), but I’ve been told directly by the Director of Loyalty at Southwest that the rate will be “favorable, and not punitive.”

Here’s how it might work to indirectly buy airline miles:

  1. Buy a cheap flight.  See the section above for more details.
  2. After purchase, modify the reservation in order to add incidental fees. See the section above for more details.
    [This step is needed only if your card rebates airline fees and not airline tickets]
  3. Later, cancel your flight.  You should have the option to refund the entire purchase price, including the add-on fees from step 2, in the form of airline miles instead of cash back.

Specifics about indirectly buying Air Canada miles.

Air Canada’s policy is described here.  Here are the basics:

  • Tickets must be for travel between March 1, 2020 and June 30, 2021
  • Existing bookings qualify
  • New bookings must be made by June 30, 2020 in order to qualify.
  • If you booked directly with Air Canada and you need to cancel for any reason, you can convert your ticket to an Air Canada Travel Voucher that has no expiry date or to Aeroplan Miles with an additional 65% bonus miles (i.e. convert credits to miles at 1.3 cents per mile).
  • For customers who booked through a travel agency, Air Canada is working to make these options available.

Specifics about indirectly buying Southwest points

Here’s Southwest’s stated policy is for converting cancelled flights into points:

Those Members who have travel funds that are set to expire or funds that are created between March 1, 2020 and September 7, 2020 will have the option to convert those travel funds into Rapid Rewards points at the same rate you would be able to purchase a ticket with points today.

When you cancel a purchased ticket, you receive travel funds that usually expire within a year.  In addition to extending the expiration date, Southwest is planning to make it possible to convert those funds to Southwest Rapid Rewards points (which never expire).  It’s unclear what they mean by “at the same rate you would be able to purchase a ticket with points today” since that rate varies due to differential taxes & fees on different flights.  But, I expect that the rate will be reasonable.  I’ve been told directly by the Director of Loyalty at Southwest that the rate will be “favorable, and not punitive.”

The key thing to remember here is that you must cancel a purchased flight before September 7th for you to have the option to convert the refund into points.  I’d recommend that you cancel well before September 7th in case it takes a while for the funds to be deposited.

Only partially tested

Our post Amex Airline Fee Reimbursements. What still works? shows reader’s experiences of the types of things that Amex has rebated even though they are not in the official list of allowed incidental fees.

Things I don’t yet know:

  1. Are there any problems with getting incidental ticket add-ons refunded as travel credits or miles?  Example issues:
    1. If the airline simply refunds the charge to the credit card you used to pay, this won’t work.
    2. Some add-ons are non-refundable.  One example is that Southwest EarlyBird Check-In is non-refundable.
  2. Are there any gotchas with the conversion of credits to miles? We don’t yet know Southwest’s conversion rate, so we don’t yet know if it’s a good or bad idea to do it. We also don’t know if there are any hoops to cross.
  3. If we bought airfare through an online travel agency, is any of this possible?  Air Canada says that they’re going to make their refund options available to travel agencies, but they haven’t yet announced the details.

Is this ethical?

I don’t believe that there’s a fixed absolute line between right and wrong.  Instead, I try to go by my gut feeling.  To me, the approach I documented above is similar in kind to signing up for a credit card to get the welcome bonus even though you know you’ll never use the card.  In both cases we’re playing by the rules even if we understand that the rewards were intended for other purposes.

I have no doubt that many will disagree and say that what I wrote is unethical.  And that’s fine.  I respect that opinion. Everyone draws their ethical line in the sand in different places.  Some readers will take issue with where I draw the line.  If that’s you, you have every right to that opinion.  Others draw their line much further out than I do, and I respect that too.

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HoKo

Hey Greg/Nick had a couple questions on this since it’s been a month:
1A. Is the southwest conversion-into-points thing active yet?
1B. If so, are there any positive DP’s that this works?
2. Which type of add-ons for Southwest do you recommend using to trigger the credit on an Amex card?

Jennifer

Any idea when this whole converting Southwest tickets into points thing might happen?

[…] Spending airline fee credits during COVID lockdowns […]

Pete H.

Thanks for the posting. But I still don’t quite get it why to buy airline credits, indirectly, instead of gift cards? I think the airline credit is less flexible than gift cards, such as non-transferable and shorter time to use it. Anything I am missing?

Nick Reyes

The fact that airline GCs won’t trigger the credit in most cases anymore. And that in the case of SW, you will hopefully be able to convert to points at a favorable ratio which will be better than a GC since they never expire and can be used and cancelled and used again at will.

[…] For more ideas of how to spend these airline fee reimbursements, see: Spending airline fee credits during COVID lockdowns. […]

[…] Miler: Spending airline fee credits during COVID lockdowns (May 25, 2020) (scroll down to the section with the heading, “Buy airline credits, […]

Jules

For those of us wanting to use our AMEX credits on airline incidental fees, I don’t see the benefit in what Greg is proposing here. Suppose I purchase a cheap United flight for $150 with my Gold card and then later pay for seat selection, bags, pet fees, etc. for an extra $100. I understand that AMEX will reimburse the $100 in extra fees which is great. However, after cancelling the flight I’m still stuck with a $150 travel credit/voucher equal that I paid out-of-pocket for which expires in 12 months and that I may not be able to use .

Jules

I guess my point is that unless you’re absolutely sure you’ll be flying on a domestic carrier in the next 12 months, this method would be a losing proposition.

Nick Reyes

First, assuming that the SW conversion is good (they say it will be), converting to points means the points will never expire.

Second, some airlines are giving vouchers good for 24 months at the moment rather than 12 See this post for each airline’s current policies:

https://frequentmiler.com/coronavirus-cancellation-policies-cruises-flights-hotels-more/#Revenue_tickets,_award_tickets,_or_Companion_Certificate_travel

The benefit in taking one of these paths is that it beats letting your credits expire unused. You’re right that depending on how you do it, you may be banking on flying again in the next year. Obviously the COVID-19 situation has put that somewhat in flux, though I’d expect air travel to return to relatively normal within a year from today. I hope so and I’d likely bet $150 on it.

Nick Reyes

I should add to that: I do understand that some people won’t be comfortable flying in the next year. In that case, SW would be the way to go.

Ling Ma

For travel credit of CSR, you can always load uber cash and then use it for uber eats.

Ling Ma

May I ask is there any airline travel bank will not expire? Say I will not even travel until 2022:) Converting SW credit to SW points later, then make it forever? Thanks.

Nick Reyes

Correct on SW. No expiration on SW points.

Jon

To use the Southwest method on the Amex Biz Platinum, can I book through amextravel.com for 5x and then cancel through Southwest, or do I have to book directly with Southwest (for 1x on Plat) and then cancel through Southwest?

Nick Reyes

Southwest flights can only be booked at Southwest.com (maybe they are available in one of the corporate portals now or something?). Definitely can’t book Southwest via Amex Travel (or Chase or Citi portals or Expedia or anything else like that).

Jon

Ah. Thought I read somewhere that you could book SW with Amex Travel by calling them.

CaveDweller

jon
I did read that TOO somewhere awhile back . But I have had like 4 SW CC’s and INK so never tried.
CAVE

Jon

The terms for the Amex Platinum I just got say: “If you select Spirit, Southwest, or AirTran Airways as your qualifying airline, you must call American Express Travel to book your flight.” This seems to suggest that it is possible to book Southwest through Amex Travel. Anyone done this before? Presumably for 5X?

Jon

I decided to chat amex and they confirmed that you can book southwest by calling amex travel, but it’s not 5X (i.e. there’s no way to get 5X for southwest with the platinum). The only way to get 5X is to book online with amex travel.

Larry

I just refunded a delta ticket with a subsequently purchased seat upgrade. I wanted a voucher for the whole thing to avoid a refund because I had received a partial credit for the fare on one card a credit for the upgrade on a different card. They said my only option on the upgrade was a cash refund. No voucher.

Larry

They didn’t offer that proactively but I did not ask. My situation was a little complicated. I bought the fare with a combo of gift card and Amex and the upgrade with Ritz. The good news is that there does not appear to have been a reversal of the credit on ritz. So far at least (about 30 days.) FWIW, I cancelled by twitter not online. Not sure what would have happened if I had used the online voucher request form. The language was too unclear for me to risk it but maybe I would have received a voucher for everything.

Nick Reyes

Historically all DPs have been that there won’t be a reversal on the Ritz credit.

ssss

What are people doing with their Amex Gold travel credits?

flag

I sent a message to Chase about the credit on my Ritz card. Chase said they currently stick to the original policy and show no sign of flexibility.

GregR

Ditto! I’ve asked Chase by SM twice so far in early April and early May, both resulting in similar answers: “I’ve reviewed your account, and see that there are no
alternatives available. But the Travel credit benefit will be valid till the end of the year.” So much for using the $300 credit now before cancelling my Ritz card when it renews in August!

Nick Reyes

Keep in mind that you could book July 2021 travel before your AF comes due and use up your $300 credit. Or follow the same techniques in this post to turn it into Air Canada credit, Southwest points, etc.

Nick Reyes

It kind of stinks that they aren’t offering anything additional, but that’s par for the course with a discontinued card (no need to encourage customers to keep a card that they no longer want to offer to new customers).

The good news is that the credit on that card is historically pretty easy to use via the same types of things Greg lays out in this post.

See also:
https://frequentmiler.com/ritz-fee-credits-what-works/

And there’s been a recent report of a $150 retention offer at Flyertalk:
https://www.flyertalk.com/forum/32380877-post3548.html

Ben

I must say that Ritz $300 is the best deal due to its flexibility (works with every carrier). Just make sure that the expense is not tagged as an airfare or gift card and claim it.

The “dangerous” part is not knowing what is not reimbursable. I had it in a similar hack I did. I purchased Delta ticket with mixed payment to trigger the AMEX Air Incidentals (it work). Then I added a class upgrade to trigger additional air incidental. That part was flagged as UPGRADE and did not trigger a refund. Later when I cancel the flight, I found that upgrade is non-refundable. I end up being the one that donates money to Delta.

ERIKA HAMILTON

Chase doesnt seem to claw back credits *yet*

dave

Greg how financially solid is Aeroplan? I need to drain all my transferable points from one program and I’m struggling with deciding on best airline partners based on redemption rates AND whether they’re likely to survive over the next year.

CaveDweller

When things get bad like now u keep the best and Air Canada isn’t one of them. I’ll keep United, Singapore,AA, SW,+INK points (500K total) ..I just applied for AA citi no fee by ur link and Called too they will send an email in 24 hrs. I want to cancel my Citi AA card $95 and my Barclay’s AA card $95 and keep the no fee.
May the Points God help us.
#stayincave

Chuckie

Do you know if converting Southwest tickets into points count towards a companion pass?

Jack Liao

Is there a date set for when this will be available (funds to points)?

losingtrader

I like the idea of tacking on pet fees to the cheapest fare I can find and refunding it into a voucher.
Only problem is I have to be the one flying, The gift certificate made it easy. In fact I’m sure I still have a few hundred in unused gift certs in my email inbox somewhere.

YoniPDX

What Airlines allow you to prepay? AFAIK – several will only charge day of and at airport.

losingtrader

No clue. I’ve never done it.

Miles

AA makes you pay pet fees at check-in. I’ve had to book flights for a relative traveling with a pet, and believe me I wish they’d let me pay in advance.

Heard you can prepay at UA, though.

Kim

JetBlue allows pre-payment of pet fees.

losingtrader

“I don’t believe that there’s a fixed absolute line between right and wrong.”
You should apply to star in the next episode of The Purge movies.

Parts Unknown

I’ll stack my ethics up against Jamie Dimon’s any day.

Bob

How about purchasing annual or day passes to airline lounges? Given recent airline extensions of annual passes, a well-timed annual lounge pass purchas might be a good use of airline fee credits in this near ”traveless” time period. I’m personally looking at an Alaska lounge annual pass purchased in late-October. Given its allowed use at several AA lounges and the (relatively) cheaper cost and its validity into 2022, it seems a good use of airline fee credits that will expire at the end of 2020 if otherwise unused. I am counting on air travel returning in 2021.

Mel

I bought day passes for the Admirals Club in Dec to use my amex travel credit and they are valid until next Dec. and the airline said they are not extending the expiration on day passes, only on annual memberships.

TJ at The Art of Travel Hacking

GREAT IDEA Greg! I love the cancel and turn into Southwest points idea.