The best credit cards for paying taxes and fees on award tickets
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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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Best cards for paying taxes and fees on award tickets
- Chase Sapphire Reserve: Best travel protections
- The Platinum Card® from American Express (including most varieties of the card): Great return on spending and good travel protections
- Ink Business Preferred Credit Card: Good return on spending, solid protections and low annual fee
- Chase Sapphire Preferred Card: Solid protections and low annual fee
|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||$695 (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%
5x total points on all travel purchased through Chase Ultimate Rewards/10%
|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.
**5x points on airfare booked directly with the airline or through Amex Travel. Additionally, starting Jan. 1, 2021, earn 5x points on up to $500,000 on these purchases per calendar year
Welcome bonus: Earn 50,000 bonus points after you spend $4,000 in the first 3 months from account opening.
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:
- Chase Sapphire Reserve credit card review
- 4 things to do once you get your Chase Sapphire Reserve
- Which purchases count as travel with Chase Sapphire Preferred and Chase Sapphire Reserve?
Welcome bonus: Earn 100,000 Membership Rewards® Points after you spend $6,000 on purchases in your first six months of card membership. You can also check to see if you’re targeted for a 125,000-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 (starting Jan. 1, 2021, earn 5x points on up to $500,000 on these purchases per calendar year); 1 point per dollar everywhere else.
Annual fee: $695 (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.
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. Enrollment required for select benefits.
For more information on The Platinum Card From American Express, check out the following guides:
- American Express Platinum review
- How to maximize benefits with the Amex Platinum Card
- Amex trip insurance changes are now in effect
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:
- Ink Business Preferred Credit Card review
- 5 reasons to get the Chase Ink Business Preferred credit card
- One year of earning and burning with the Ink Business Preferred Card
Welcome bonus: Earn 60,000 bonus points after you spend $4,000 on purchases in the first three months from account opening.
Rewards: 5x total points on all travel purchased through Chase Ultimate Rewards, 3x points on dining, including eligible delivery services, takeout and dining out, 3x points on select streaming services, 3x points on online grocery purchases (excluding Target, Walmart and wholesale clubs), 2x points on all other travel, 1x point on all other purchases
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:
- Chase Sapphire Preferred credit card review
- 5 reasons why the Chase Sapphire Preferred should be your first card
- Chase Sapphire Preferred benefits you might not know about
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.
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Earn 90,000 bonus miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new card in the first three months of card membership. Offer ends 11/10/2021.
With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.
- Limited Time Offer: Earn 90,000 Bonus Miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months. Offer expires 11/10/2021.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
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- Earn 1X Miles on all other eligible purchases.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
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