Get Full Value from Your Airline Incidental Credits (2021)

From Travel Strategies
Jump to: navigation, search

  Credit Card Reference

PlatinumCredit.png

"Airline Incidental Credits" are a potentially valuable feature of several credit cards. You'll get a rebate for any money you spend on baggage, cancellation, seat selection, and other fees.

But you may not naturally generate enough qualifying "incidental" charges to fully take advantage of your available credits, especially if you only have a short period of time (such as with a calendar-year credit that you receive towards the end of the year) ore are limited to a single airline.

If you can't use your Airline Incidental Credits naturally, there are some tricks that can allow you to take advantage of the full credit amount.

Even if you'll eventually generate enough natural expenses to fully use your credits, you may find it easier to "take care of the credit" using one of these approaches and avoid needing to worry about making sure to use the appropriate card for your airline incidental purchases over the course of the year.


Cards with credits

Quite a few cards have airline incidental credits:

* The airline incidental credit is being phased out for the Amex Gold cardholder. If you had the card before the benefit was removed, you'll still get the credit for 2021. After that, it will be completely gone.

The discontinued FNBO Travelite card also has a $100 airline incidental credit (following Amex's normal rules).

In addition, the Sapphire Reserve Card, the Citi Prestige Card, and the Altitude Reserve Card have general-purpose travel credits. But these can be used for actual airfare and hotel reservations (among other travel expenses) and not just "incidental" expenses.

What should always work

By the official terms, the following types of purchases are considered "incidental purchases":

    • Ticket change / cancellation / redeposit fees. Sometimes these are unavoidable and they are quite expensive. When you can't avoid them, these are the most likely fees that will use up a significant amount of your credits.
    • Onboard food and beverage purchases. Many people buy the occasional snack, meal, or drink.
    • Checked bag fees. Assuming you don't have a credit card or elite status to waive these fees.
    • Seat selection fees. But not the higher fees to upgrade to a better class of seats.
    • Lounge passes and memberships. If you decide to pay the high price for access.
    • Pet and phone reservation fees. If they apply.
    • WiFi bought from the airline. But in most cases, you are paying a 3rd party like GoGo and these payments won't count.

Fees that you pay as part of making the initial reservation generally won't be recognized and won't qualify for the credit.

Depending on the airline and the credit card, you might also get credit for seat upgrade fees and award booking fees. But the terms specifically exclude Airline Tickets, Award Tickets, Upgrades, Points Purchases, Point Transfer Fees, Duty Free Purchases, and Gift Cards.

Checking for up-to-date information

What works and what doesn't work (outside of the officially approved "incidentals") can change at any time.

FlyerTalk has a set of threads dedicated to discussing what types of charges from various airlines work for American Express cards.

Other credit card companies are sometimes more lenient about what works on their cards, but there are less people reporting information on the web. Flyertalk has threads for the Bank of America Premium Reward card, the the CNB Crystal Infinite card. Frequent mile has a good article about what may work with the no-longer-available-for-new-signups Ritz Carlton card.

Converting to airline credits

In 2021, the major US airlines "permanently" got rid of change fees on domestic non-basic-economy tickets.

You can now easily convert your "Airline Incidental Credits" into actual credits (with the airline) that you can use to purchase airline tickets.

  • The basic process is straightforward. Start by purchasing a low-cost refundable ticket. Once its purchased, access the ticket online and use a credit card with an airline incidental credit to pay for a seat selection or other fee. In a few days, you'll receive a statement credit for the fee. After at least 24 hours, when you cancel the underlying ticket, you'll receive a credit from the airline for the entire amount of the underlying ticket and the extra fees. You can then use that credit for future flights.
  • For example, if you wanted to do this with Alaska Airlines, you would buy a longer-distance main-cabin round trip ticket for let's say $200. Then you'd use your Amex Platinum Card to pay enhanced economy seat selection fees for each direction, at around $100 each. When you cancel the ticket, the entire amount will be placed in your Alaska "wallet" (where you can use it for future flights). You'll have spent a total of $400, but you'll wind up with a statement credit on your Platinum Card for around $200 and an airline credit good for $400 of future airfare.

  • The main downside is that the airline credit will have an expiration date. With United airlines, it is even worse, because if you use the credit on a less expensive future flight, you won't get to keep the remaining credit amount. In some cases, you can effectively extend the date of the credit by using it to buy and cancel another airline ticket.
  • If you have multiple cards with airline incidental credits, you can use different cards to pay for different fees on the same ticket. For example, you can use one card to pay for seat in one direction, and once you're done paying, use another card for the return.
  • It is most efficient if you can purchase the underlying ticket with existing airline credits. That way, you'll only be adding the amount of the extra fees to your total balance of airline credits. If you have a lot of credits to use, don't buy a lot of tickets. Once you're done paying extra fees on your first ticket, cancel it, and use the resulting airline credits for your next ticket (rather than paying out of pocket). Starting with a couple of hundred dollars in airline credits, you should be able to convert any amount of airline incidental credits, without needing to invest any more money in actual ticket purchases.
  • To keep the number of cancelled tickets to a minimum, you can purchase multi-city multi-person tickets. A single multi-legged journey for four passengers can provide many different opportunities to pay for extra fees. If you have a lot of cards that have incidental credits, this reduces the number of times you need to cancel tickets with your favorite airline.

Buying airline gift cards

Up until recently, the most common way to "hack" airline incidental credits was via gift cards. Even though gift card purchases are explicitly excluded in the terms and conditions, in practice, you often received credit for purchases of low denomination airline gift cards (from some airlines). It was easy to spend the entire amount of the credit on gift cards and then either use the gift cards to purchase airline tickets (right away or at some later date) or sell the gift cards on the web.

This trick allowed the entire value of the credit to be used on airplane tickets or a high percentage of the credit to be received in cash. Obviously, purchasing gift cards, and remembering to use them later, was a nuisance. But for many people, it was better than letting part of their airline incidental credit expire unused.

Over time, the set of airline where this worked with Amex cards got smaller and smaller, so that it was only working on American Airlines, Delta Airlines, and Southwest. There were different rules for each airline on exactly how the gift cards needed to be purchased.

In mid-2019, this stopped working altogether for Amex cards. But it still works for airline incidental credits from credit cards from some other banks.

If you can't find any recent details online, you can make a small test purchase. It it works, you'll receive your credit. If it doesn't, you'll wind up with a still useful gift card and need to try something else. To maximize your chances, in the absence of other information, stick to $50 gift cards, buying multiple cards when necessary.

Some other potential ways of getting value from your credits

There are some other tricks that can help get full value from your airline incidental credits. These can be particularly valuable for Amex cards because it is harder to naturally use your credits when you are limited to only a single airline (and because gift cards no longer work).

Low priced airline tickets

With some airlines, low priced flights (generally under $100) are treated as incidentals, allowing you to receive the credit for actual airline ticket purchases.

  • The typical limit is $100 per ticket. Depending on your travel patterns, you may wind up needing to purchase an occasional inexpensive flight. The set of airlines where this works depends on the card and may change at any time, but you are most likely to have success with JetBlue and Southwest. Check the links above for more up-to-date information.
  • If necessary, you can split the cost of a ticket between gift cards and your credit card to lower the purchase amount to below the limit. Let's say you need to take a flight that costs $175 each way. You could use $100 worth of gift cards to lower the credit card charge to $75, which may then trigger the incidental credit, letting use the credit to offset at least part of the ticket price.
  • On Delta airlines, the additional charges are treated as a special "additional collection fee" rather than a regular purchase, and these fees have triggered the credit.

Refunding award tickets with extra fees

When you book an award ticket, you always have to pay at least some money in taxes and fees. For domestic flights, this may only be $5.60. But fees can be much higher for many international tickets. These award ticket fees are treated as incidental purchases on some airlines. Check the FlyerTalk threads for the latest information.

With the elimination of change fees on many flights, some award tickets are can now be cancelled without any "redeposit fees". And high-level elites often have additional cancellation privileges.

When you make an award ticket reservation, the award fees will be credited using your airline incidental credit. When you later cancel the reservation, the fees will be refunded to the card. As of now, this refund doesn't reverse the initial credit, essentially turning the credit into cash.

There is some chance that the credit card companies will make an effort to recognize these refunds and reverse your previous credit. If this happens, your charges might slip through the cracks if the fees are paid are calculated in a foreign currency, so the exact amount of money of the initial charge and the refund don't exactly match.

Potential Clawbacks with Amex

Be warned. When Amex cracks down on loopholes, they sometimes come after points or credits, even if has been months since you've earned them. For example, Amex may credit award fees on certain airlines now, and then come back sometime in the future and "take those credits away", essentially putting a new charge on your current statement. So, there is always some risk when using your credit for anything except the standard set of incidental expenses.

Taking advantage of credit card company policies

There are several ways that you can take advantage of the credit card company's policies to improve the value proposition of travel credits. We avoid these approaches, because we feel like they unfairly take advantage of consumer-friendly credit card policies. Plus banks don't like when you cancel or convert your cards too quickly and may decide they don't want to do business with you. But some people may feel differently.

  • If you get a new credit card in December, it is typically possible to "triple-dip" any calendar-year credit. As long as you cancel most cards within a month or so of your annual fee posting, the fee will be refunded. So you could sign up in December, take advantage of the credit before the end of the year, take advantage of another credit the following year, and then take advantage of the credit a third time in January just before you cancel your card. All with only paying a single year's annual fee.
  • After the initial year, you can often downgrade your card, once you've used your credit, and receive a partial refund of your annual fee. Most cards with credits have significant annual fees. Once you've used your credit, you can often downgrade your card and receive a partial credit against the annual fee. Then, the following year, you could conceivably upgrade the card, take advantage of the credit another time, and then downgrade again. You typically can't do this in the initial year, due to banking regulations.
  • You can sometimes cancel your card after you've used your credit and get refunded part of the annual fee. For calendar-year based credits, you can still take advantage of two different credits, while only paying a fraction of the annual fee. Not every bank will pro-rate the annual fee for cancelled cards. You'll need to do some research online.



Send comments or suggestions to editor@travelstrategies.com or leave a comment below.



blog comments powered by Disqus