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One thing that looks sure to continue year-on-year is the continued rise in airline fees and charges. In 2015 U.S. airlines took in a touch over $11 billion in fees and charges, almost 25% more than 2014, and it’s passengers wearing the expense.
Credit cards that offer airline and travel credits have become a popular method of counteracting ever-rising airline fees and charges, with everything from carry-on bags to bottled water now costing on some airlines.
First adopted by Amex for its Platinum card pair, followed closely by the Citi Prestige® Card. Chase has now taken the annual travel credit to a whole new level, offering up to $300 on the Chase Sapphire Reserve®, which covers everything from airline tickets, hotel stays, and seat upgrades to in-flight entertainment and excess baggage fees.
The art of rewards travel is to reduce costs as much as possible, but the rise in taxes, fees, and incidental charges means frequent flyers need to adapt their redemption strategies.
So, how can we keep costs to a minimum on award redemptions, and pay the lowest possible price on cash fares when all these ancillary charges can add around 30% to the cost of a ticket, expenses often not covered by award fares? By using credit cards that offer travel credits for expenses like airline incidentals, taxes, and upgrades!
Credit Cards That Offer an Airline or Travel Credit
It’s worth noting that not all travel credits are created equal. Some have a number of restrictions on what cardholders can claim and require cardholders to request the credit, whereas others cover almost any travel-related expense and will credit automatically. While we cover the basics for each card, reading the T&C's will give you a much greater understanding, possibly saving hundreds of dollars over the life of the card.
|Credit Card||Annual Credit||Eligible Purchases||Cover Airline Change/Cancellation Fees||Annual Fee|
|Chase Sapphire Reserve®||$300 travel credit||Almost any travel purchases||Yes||$550|
|U.S. Bank Altitude™ Reserve Visa Infinite® Card||$325 travel credit||Airlines, hotels, car rental companies, taxis, limousines, passenger trains, and cruise lines||Yes||$400|
|Citi Prestige® Card||$250 travel credit||Airlines, hotels, car rental agencies, travel agencies/travel aggregators/tour operators, commuter transportation, ferries, commuter railways, subways, taxis/limousines/car services, passenger railways, cruise lines, bridge and road tolls, parking lots/garages, and bus lines||Yes||$495|
|HSBC Premier World Elite Mastercard® credit card||$100 air travel credit||Ticket purchases, seat upgrades, baggage fees or in-flight purchases||Yes||$395|
|Crystal® Visa Infinite® Credit Card||$250 airline incidentals credit on U.S. domestic airlines only||Ticket change/cancellation fees, checked baggage fees, inflight entertainment, onboard food and beverage charges, airport lounge membership fees and day passes, onboard wireless charges (excluding Gogo Inflight Wi-Fi), and TSA Pre✓® membership application fee purchased from qualifying U.S. domestic airlines||Yes - U.S. domestic airlines only||$400|
|The Ritz-Carlton Rewards® Credit Card||$300 airline incidentals credit (Isn't applied automatically - must call charges in)||Non-ticket airline purchases including baggage fees, in-flight entertainment, food, upgrades, and lounge passes and memberships||No||$450|
|Hilton Honors American Express Aspire Card||$250 airline incidentals credit on one airline - chosen annually|
$250 Hilton Resort Statement Credit
|Baggage fees, booking fees, in-flight food, and lounge admission|
Eligible purchases made directly with participating Hilton Resorts - Includes charges made at restaurants, spas, and other establishments within the hotel property if charged to your room and paid for with your card.
|Yes - On chosen airline||$450|
|The Platinum Card® from American Express||$200 airline incidentals credit on one airline - chosen annually||Baggage fees, booking fees, in-flight food, and lounge admission||Yes - On chosen airline||$550 - Rates & Fees|
|The Business Platinum Card® from American Express||$200 airline incidentals credit on one airline - chosen annually||Baggage fees, booking fees, in-flight food, and lounge admission||Yes - On chosen airline||$595 - Rates & Fees|
|PenFed Pathfinder Rewards American Express® Card||$100 airline incidentals credit on U.S. headquartered airlines||Baggage fees, flight-change fees, in-flight food and beverage purchases, airport lounge day-passes, pet-kennel fee, and phone reservation fees||Yes - U.S. headquartered airlines only||No annual fee|
|American Express® Gold Card||$100 airline incidentals credit on one airline - chosen annually||Baggage fees, booking fees, in-flight food, and lounge admission|
* Note: this credit is being removed as a benefit in 2022.
|Yes - On chosen airline||$250 - Rates & Fees|
|Bank of America® Premium Rewards® Credit Card||$100 airline incidentals credit on U.S. domestic airlines only||Seating upgrades, ticket change/cancellation fees, checked baggage fees, in-flight entertainment, onboard food and beverage charges, and airport lounge fees||Yes - U.S. domestic airlines only||$95|
|EXPEDIA®+ VOYAGER CARD from Citi||$100 airline incidentals credit on qualifying U.S. domestic airlines only||Checked bags, inflight entertainment or refreshments, inflight Wi-Fi, and Global Entry or TSA Pre✓®||No||$95|
|Southwest Rapid Rewards® Priority Credit Card||$75 Southwest Airlines Annual Travel Credit||All Southwest purchases (excluding Upgraded Boardings and inflight purchases)||N/A - Southwest doesn't charge change/cancellation fees||$149|
|U.S. Bank FlexPerks® Gold American Express® Card||$25 airline incidentals credit with each redeemed airline award||Baggage fees or in-flight food and drinks||No||$85|
The last four cards we’ve grouped together. While they don’t offer travel or airline credits, they earn points that can be redeemed for statement credits towards travel expenses. Because it works as a statement credit, any payment that codes as travel from the merchant qualifies — just make sure you watch the minimum redemption thresholds for these of these cards.
- Capital One Venture Rewards Credit Card
- Capital One VentureOne Rewards Credit Card
- Bank of America® Travel Rewards credit card
- Barclaycard Arrival Plus® World Elite Mastercard® (no longer open to new applicants)
Airline and travel credits are a great way of reducing your out of pocket expense for traveling. Yes, most cards charge a hefty fee for the privilege, but they also offer a huge range of benefits for the annual fee which can include lounge access, elite status with hotel chains, and travel insurance that will drop your travel expenses over the long term.
Which travel credit is best? All things considered, the Chase Sapphire Reserve® has the most valuable travel credit. At $300 as opposed to $250 for the Prestige Card and $200 on the Amex Platinum, it also has the widest definition of claimable expenses, covering anything from a train ticket to road tolls, and online travel agencies.
For rates and fees of the cards mentioned in this post, please visit the following links: American Express® Gold Card (Rates & Fees), The Business Platinum Card® from American Express (Rates & Fees), and The Platinum Card® from American Express (Rates & Fees)
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