No Excise Fee on American Express US Airline Transfers
Update: Some offers mentioned below are no longer available. View the current offers here.
As I've written about before, an interesting result of the ongoing budget drama and quasi-FAA shutdown is the inability for airlines to collect certain taxes on tickets. Fares were briefly lower last week, until the opportunistic airlines decided (almost in unison, hmm) to raise fares the amount of the taxes they would have collected.
While I completely understand that airlines are businesses and need to make money, I was disappointed nonetheless, because airfares this summer (at least on the routes I take) have skyrocketed and every little savings helps.
However, not all savings are lost. American Express is not charging the typical 6/100 cent per point tax when you transfer Membership Rewards points to a US Airline partner (Delta, Continental, Frontier, AirTran, JetBlue and Hawaiian). That fee seems insignificant, but equates to $60 on a 100,000 point transfer and is capped at $99 for any single transfer.
While I generally recommend keeping points in your account until you have an absolute need to transfer them, this tax holiday can save you a good amount, especially if you were planning to transfer a points to Delta for either of their 50% or 67% transfer bonuses, or move a large chunk to Continental before their last day in the program (September 30th, 2011). I haven't been following the budget crisis too much, but I'm sure this tax holiday will come to an end soon! (Note: you never have to pay these taxes on transfers to foreign frequent flyer program partners like British Airways and ANA)
FYI: several people have asked me whether you should pay the excise fee with points or cash and I always recommend using cash (unless you are cash broke and points rich) - Amex points are generally more valuable than the 1 cent per point ratio Amex designates. I will talk more about this subject in an upcoming post on the Pay With Points feature.
If you need a Membership Rewards card, check out the comments on this post. It appears you can still get 100,000 miles for the Platinum Card or 75,000 for the Premier Rewards Gold. The official bonuses on the cards are 25,000 (Platinum) and 15,000 (Premier Rewards, with first year $175 annual fee waived), but Amex seems to be in a good mood lately and is giving increased bonus offers to those who ask. And as I always say, it never hurts to ask.