Premium Card Travel Credit Battle: Which One Reigns Supreme?



Today we’ll be taking a look at the specifics of travel credits, which are a part of all issuers’ premium card offerings. As none of these credits roll over, the ability to utilize them fully is the key to extracting maximum value from each card, and plays an enormous role in determining if the high annual fees are worth applying or keeping a given card. Although these credits are frequently advertised as general travel benefits, the ability to actually apply them to offset purchases ranges from very restricted, such as AMEX’s offerings, to very generous, as is the case with Chase’s and USBank’s top tier products.

 
 
 
 

Another key aspect of these credits is whether they apply based on the cardmember year or calendar year. Why is this important? Calendar year benefits reset on January 1st and can, thus, be used more than once in your first year with that card. Say you signed up for the Citi Prestige, which comes with a 250$ annual airfare credit, on 6/1/18. You will have 250$ to spend by 12/31/2018. Come 1/1/19, you will have another 250$ available! If you use all of this as well and cancel the card prior to 6/1/2019, you will have netted 500$ in benefits from paying a single annual fee of 450$! And in most cases, you can actually cancel your account within a month of your anniversary date and request an annual fee refund. This trick obviously only applies to your first card year, as in all subsequent years you will have already paid an annual fee to utilize additional credits. This makes it ever more important to know all of the specifics regarding your card’s benefit to fully take advantage of maximally offsetting its’ annual fee. Banks have gotten wise to this and, in recent years, have started to introduce changes. Chase, in particular, recently switched the Sapphire Reserve’s travel credit from calendar to cardmember year, making it slightly less attractive. This means that if you signed up for this card on 6/1/2018 and maximized the credit, your next credit will not be available until after your anniversary date of 6/1/2019, which – surprise! – comes with another annual fee due. You can still try to use the credit and cancel the card within 30 days, but this change makes it that much harder to ensure that you are able to do this within a limited time span.

A comparison of the top-tier cards from all of the issuers’ we’ve covered so far on this site is illustrated below:

Premium Card Travel Credit Comparison

Comparison of travel credits among premium cards. Negative annual fees in red indicate net cash back (amount you earn after accounting for the annual fee).

As you can see, there is a wide range of factors that need to be taken into account, when deciding whether to sign up for or keep a card. To make things easy, I included the expected benefits from a card in Year 1 for those that offer calendar year benefits as described above, as well as in all subsequent years. Looking at the chart, you can immediately appreciate that the only common travel reimbursement covered are airline incidentals. These including such things as seat purchase and baggage fees, on-board purchases of food and drinks, and lounge passes. This category does not apply to airfare, which is why there is a separate column for those specific purchases. The most generous cards – from Chase and USBank – cover purchases that code as travel. If you want to read more about the specifics regarding this, please refer to my prior posts below for Chase cards and USBank cards.

I also broke out Uber as a separate category, as this is a specific benefit from the American Express personal Platinum card family, which we covered previously in this post on AMEX cards.

As Uber is coded as a travel-related purchase, it would also be covered by both Chase and USBank, but while their cards’ travel credits would also apply to Lyft and other ride-sharing services, AMEX is strictly limited to Uber. Moreover, AMEX’s credit for Uber is very particular – instead of providing a lump sum of 200$ to spend in a calendar year, they give out 15$ for each calendar month that can be applied to Uber purchases (with an additional 20$ for a total of 35$ in December). These credits do not roll over nor can you shift them around – if you do not use Uber for a month, there’s no way of getting it back. As this benefit is dependent on calendar month, you cannot get back more than 200$ in Uber credits in your first cardmember year, unlike the airfare credit we discussed above.

Similar to the restrictive nature of the Uber credit, AMEX is equally particular about how you can utilize the airline incidental credit, which is a benefit of business and personal Platinum cards, as well as the Premier Rewards Gold. They require you to make a selection of a single preferred airline and only eligible purchases from that carrier will be reimbursed; your credit will not be eligible for spending on airlines other than your selection! Only these participating carriers can be selected as your preferred airline:

  • Alaska
  • American
  • Delta
  • Frontier
  • Hawaiian
  • JetBlue
  • Spirit
  • Southwest
  • United

Your selection resets every calendar year – if you do not change it in January, AMEX automatically carries forward your prior years’ choice, although changing it after this date is usually not hard, provided you did not use any of your credit. If you made a mistake in selecting your airline, you can call AMEX and have them change it manually as well, but they may obviously frown upon changing this repeatedly or, say, 11 months into the year when you have spent half of your credit on another carrier. In this regard, Bank of America’s Premium Rewards card is much more user-friendly and flexible – it reimburses you for the same expenses, but the credit is not limited to a single carrier, but rather can be used on all the airlines from AMEX, with the exception of Spirit.

I really hope that this post has been helpful to you and will aid you in figuring out the best way to maximize the benefits of your credit cards, whether you are just thinking of applying for a new premium product and are in the middle of your research, or are a seasoned pro, looking for a simple way to quickly compare benefits and decide which cards to use in for particular purchases. Of course, as the travel credit is just one of many benefits available for each card, you should not base your decision solely on this one aspect and need to take into account all of the other protections and advantages available, and how they directly apply to you. We hope to follow up on exploring more of these in the future to continue our data-driven approach to credit card miles and travel!

 
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