The best credit cards for paying taxes and fees on award tickets

Jun 12, 2020

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Given the current environment, it might be wise to redeem your points and miles before spending cash on travel this year. And unless you’re new to the points and miles hobby, you’re probably all too familiar with the fact that those “free” award flights are almost never completely free. Although there are ways to cut them down, you’ll almost always face the unfortunate addition of taxes and fees. These can range from $5.60 to upwards of $800 one-way for some aspirational awards.

When it comes to paying these fees, the best credit card for airfare purchases isn’t always the best option. Unlike cash tickets, there’s a more important factor to consider than just how many extra points you’ll earn: travel protections. Coverages such as baggage and trip delay reimbursement can be hugely valuable, and some card policies stand out more than others.

With all that in mind, here’s a rundown of the best credit cards for paying taxes and fees on award tickets (and yes, it’s a surprisingly short list).

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Baggage arrives from Delta Air Lines Inc. flights at Los Angeles International Airport (LAX) on Friday, March 29, 2019 in Los Angeles, Calif. © 2019 Patrick T. Fallon for The Points Guy
(Photo by Patrick T. Fallon for The Points Guy)

Best cards for paying taxes and fees on award tickets

Card Bonus for Airfare Purchases/Return*
Protection Notes Annual Fee
Chase Sapphire Reserve 3x points/6% Best protections all-around $550
The Platinum Card® from American Express 5x points/10% Strong protections, but no baggage delay insurance and requires you to book round-trip travel $550 (see rates and fees)
Ink Business Preferred Credit Card 3x points/6% Weaker across the board than the Chase Sapphire Reserve, but good enough for most situations $95
Chase Sapphire Preferred Card 2x points/4% Weaker across the board than the Chase Sapphire Reserve, but good enough for most situations $95

*Bonus value is an estimated value calculated by TPG and not the card issuer.

Chase Sapphire Reserve

(Photo by The Points Guy staff)

Welcome bonus: Earn 50,000 Ultimate Rewards points after you spend $4,000 on purchases in the first three months

Rewards: 10 points per dollar on Lyft rides, 3 points per dollar on travel (excluding $300 travel credit) and dining at restaurants and 1 point per dollar on everything else.

Annual fee: $550

Analysis: The Chase Sapphire Reserve offers the most comprehensive suite of travel protections. By paying for at least a portion of your ticket with this card, you’ll be covered by a plethora of protections, including baggage delay, lost/damaged baggage, trip delay reimbursement, trip cancellation and interruption protection, medical evacuation benefit, travel accident insurance and emergency medical and dental benefit.

Of these, the most important benefits in my opinion are trip delay reimbursement, which provides up to $500 per ticket if you’re delayed more than 6 hours or require an overnight stay, and baggage delay protection, which provides up to $100 reimbursed per day for up to 5 days if your baggage is delayed more than 6 hours.

Other benefits include an annual $300 travel statement credit, a Global Entry/TSA PreCheck application fee credit and a Priority Pass Select membership that includes guests. You’ll also receive up to $120 in DoorDash credits ($60 in 2020 and $60 in 2021), free Door Dash DashPass membership and a Lyft Pink membership, which includes ride discounts and priority airport pickups.

For more information on the Chase Sapphire Reserve, check out the following guides:

The Platinum Card from American Express

Photo by Clint Henderson/The Points Guy)
(Photo by Clint Henderson/The Points Guy)

Welcome bonus: Earn 60,000 points after you spend $5,000 in the first three months of opening your account. You can also check to see if you’re targeted for a 100,000-point bonus through the CardMatch tool.

Rewards: 5 points per dollar spent for flights and hotels booked through Amex Travel as well as flights booked directly through the airline; 1 point per dollar everywhere else.

Annual fee: $550 (see rates and fees)

Analysis: The Platinum Card from American Express is the next best option for paying award taxes and fees. In January 2020, the card added trip cancellation/interruption and trip delay insurance, making it more much more competitive in the luxury card segment. However, the protections are a bit more restrictive than those offered by the Chase Sapphire Reserve.

The Amex Platinum’s trip delay insurance also kicks in when you’re delayed by six or more hours, but it’s capped at two claims per eligible card per 12-month period and doesn’t cover overnight delays that are less than six hours. The benefit is also a bit more restrictive in that it requires round-trip travel, all of which must be paid for with your card (paying taxes and fees on award tickets or Pay With Points tickets are covered). Note that a combination of one-way tickets would qualify as round-trip travel for the purposes of Amex’s insurance coverage if you’ll eventually end up in your departure city. Unlike the CSR, the Amex Platinum doesn’t offer baggage delay insurance or travel accident insurance, but it does offer lost luggage reimbursement.

Related: Comparing built-in travel insurance with the Chase Sapphire Reserve and Amex Platinum

The card offers a number of other benefits to make your travel experience more enjoyable like a $200 airline-fee credit, Global Entry/TSA PreCheck application fee credit, unparalleled lounge access, automatic Gold status with Hilton and Gold Elite status with Marriott and up to $200 in Uber credits annually. The card also offers various useful non-travel benefits like up to $100 in credit at Saks Fifth Avenue each year.

For more information on The Platinum Card From American Express, check out the following guides:

Ink Business Preferred Credit Card

(Photo by The Points Guy staff)

Welcome bonus: Earn 100,000 bonus points when you spend $15,000 in purchases in the first three months of account opening.

Rewards: 3x on the first $150,000 spent each cardmember year on travel, shipping purchases, internet, cable and phone services and advertising purchases made with social media sites and search engines.

Annual fee: $95

Analysis: If you’re a business owner, you can get strong travel protections with the Ink Business Preferred, and they don’t require the purpose of the trip to be business to qualify. The Business Preferred offers many of the same benefits as the Chase Sapphire Reserve, but at a much lower price point in exchange for less coverage. For instance, the card offers trip delay reimbursement, but only for delays that are more than 12 hours or require an overnight stay.

What’s unique about this card is that although it has a significantly lower annual fee than the Chase Sapphire Reserve, it offers the same travel earning rate of 3 Chase Ultimate Rewards points per dollar spent on airfare and everything else that Chase includes in its travel classification.

For more information on the Ink Business Preferred Credit Card, check out the following guides:

Chase Sapphire Preferred Card

(Photo by John Gribben for The Points Guy)
(Photo by John Gribben for The Points Guy)

Welcome bonus: Earn 60,000 Ultimate Rewards points after you spend $4,000 on purchases in the first three months.

Rewards: 5 points per dollar on Lyft rides, 2 points per dollar on dining and travel purchases and 1 point per dollar on everything else.

Annual fee: $95

Analysis: The Chase Sapphire Preferred is ideal for infrequent travelers. It provides similar travel protections as the Ink Business Preferred, including trip and baggage delay protection, and has the same modest $95 annual fee. With this card, you’ll earn 2 Chase Ultimate Rewards points per dollar spent on travel and dining purchases so you’ll have the peace of mind knowing you’re insured and still earn a fair amount of bonus points on any taxes and fees.

For more information on the Chase Sapphire Preferred, check out the following guides:

Bottom line

At first glance, it may seem like The Platinum Card® from American Express would be the obvious choice as it offers 5x points on all airfare purchased through Amex Travel, topping all of the other cards in this list get. While the card does offer some major trip protections, as you can see, it still is a bit restrictive compared to the Chase Sapphire Reserve.

In most cases, the taxes and fees on these awards are so cheap that it’s worth forgoing the couple extra dollars in points you might get with another card to focus on all the extra insurance features that could potentially save you thousands if something goes wrong. So in this case, don’t worry about losing a few extra points — instead, buy yourself peace of mind with top travel protections just by putting a few dollars on one of these top cards.

For rates and fees of the Amex Platinum Card, please click here.

Featured image of first class on Lufthansa’s 747 by Zach Honig / The Points Guy.

Chase Sapphire Preferred® Card

WELCOME OFFER: 80,000 Points

TPG'S BONUS VALUATION*: $1,600

CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

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More Things to Know
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 toward travel when you redeem through Chase Ultimate Rewards®.
  • 2X points on travel and dining at restaurants worldwide, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 80,000 points are worth $1,000 toward travel.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Earn 5X points on Lyft rides through March 2022. That’s 3X points in addition to the 2X points you already earn on travel.
Intro APR on Purchases
N/A
Regular APR
15.99%-22.99% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.