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TPG reader Max sent me a tweet to ask about booking airline awards:
“Which frequent flyer programs charge fees when you book with miles?”
Airlines aren’t shy about tacking on fees for just about everything from checking a bag to printing a boarding pass. Still, I find award booking fees to be particularly insidious, since they generally don’t reflect any service or value added to your fare. Much like hotel resort fees, they’re basically just surcharges on travel that you’ve already paid for.
US Airways was the last major domestic carrier to charge a standard fee simply for the privilege of redeeming your miles. Fortunately, the Dividend Miles “award processing fee” (which was as high as $50 for international flights) was nixed during the recent merger with American Airlines. However, there are plenty of other fees still associated with booking awards, some of which can be very costly.
Most airlines charge a direct ticketing fee for booking awards with the help of an agent. You’ll generally pay $15-$35, depending on the airline and whether you book by phone or at a ticketing counter. However, you can often get this fee waived if your award can’t be booked online. Another common charge is the close-in booking fee, which varies significantly from one carrier to another. For example, American and United both charge $75 for awards booked less than 21 days out, while Spirit charges you for awards booked up to 180 days out.
Perhaps the most egregious fees are fuel surcharges, as these can sometimes cost as much as paying for a ticket outright. Fortunately, there are plenty of strategies you can use to avoid them. Two other big ones to watch out for are change/cancellation fees and award redeposit fees (to recover your miles if you have to cancel), as these can add up quickly when you’re traveling in a group.
One way to curtail these fees (or eliminate them altogether) is by earning airline elite status. For example, United reduces its close-in booking fee to $50 for Silver status and $25 for Gold status, and it waives the fee entirely for Platinum, 1K and Global Services members. Even if your elite benefits don’t explicitly save you from a certain fee, you may have luck simply asking a sympathetic agent to waive it for you.
If you do have to pay fees for award travel, keep in mind that several credit cards offer statement credits for airline incidentals, including the Citi Prestige Card and The Platinum Card from American Express. You can also redeem Barclaycard Arrival miles, Capital One Venture miles or other points to offset fees charged to an eligible card — it’s not the most exciting way to spend your rewards, but it will help keep money in your pocket.
The best way to avoid these fees is to get acquainted with the program rules before you ticket an award. If you’re planning a last-minute vacation, consider booking with Alaska, Delta or another program that won’t charge a close-in award fee. If your schedule is uncertain, book with Southwest Rapid Rewards to avoid change fees. For more suggestions, check out these posts:
- How to book awards with Alaska, American, Delta, United, Virgin America and Air Canada
- Comprehensive Guides to Changing and Canceling Award Tickets
While Citi announced some negative changes to this card back in July — including a lower sign-up bonus, the elimination of Admirals Club access and the end of the free rounds of golf benefit — one of its most valuable perks still remains, which is the 4th Night Free perk. This benefit alone can save you thousands of dollars a year if you use it to its full advantage.