Do You Earn Credit Toward Elite Status by Booking Flights With Gift Cards?

“Reader Questions” are answered twice a week by TPG Senior Points & Miles Contributor Ethan Steinberg.

While some of the best bonus categories on travel rewards credit cards come for travel purchases (and even more specifically for airfare), from time to time you may find yourself using an airline gift card to pay for your flight. TPG reader Ricardo wants to know if he’ll still earn credit toward his elite status if he does this …

I just got an email from Delta offering a $25 bonus if I buy $250 in gift cards. If I go that route and then buy Delta flights, would I still earn Medallion Qualification Dollars (MQDs)?

TPG READER RICARDO

That pesky revenue requirement is often the hardest part about earning elite status for many deal-savvy travelers, and every dollar spent can help. It’s natural for Ricardo to be intrigued by this promotion from Delta, as it offers an immediate 10% bonus (if you purchase $250 in gift cards). Based on TPG’s valuations, that’s the same return you’d earn if you bought airfare directly with Delta and used The Platinum Card® from American Express to earn 5x Membership Rewards points on the purchase. It would also be better than buying Delta flights directly with other popular cards for airfare like the Chase Sapphire Reserve and its 3x points on all travel purchases (6% return).

Whether you bought gift cards through a sale like this, as part of your annual Amex airfare credit or as one of your Choice Benefits selections, they function the exact same way: They are a method of payment akin to using a credit card. As a result, if you use airline-branded gift cards to book a flight directly with an airline, you will earn elite and redeemable miles at the exact same rates as if you used a credit card. This means a general Delta SkyMiles member with no elite status will earn 5x redeemable miles per dollar spent, Medallion Qualification Miles (MQMs) based on the distance flown/type of ticket, and 1 MQD per dollar spent on base airfare.

While it seems like Ricardo will have at most one or two Delta gift cards from this sale (depending on whether or not the $25 bonus is issued as a separate card), it’s worth remembering that Delta limits you to using a max of three gift cards per transaction (American’s limit is 8). This is especially relevant for people who have multiple smaller denomination cards from their Amex Platinum credit, as it might affect your ability to redeem all your gift cards in one go.

Finally, keep in mind that buying airfare using gift cards exclusively will negate any trip cancellation protection or trip delay coverage that would’ve been provided with a card like the Sapphire Reserve. Snagging the 10% bonus may sound good, but be aware that if things go wrong, you won’t be covered.

Bottom Line

Once you book your flight, you’ll earn miles at the exact same rate whether you pay with a rewards credit card, a cash equivalent like a gift card, or even a debit card (though if you’re reading this article, hopefully you know better). The only factors that can affect your earning rate are the fare class you book, the airline you fly or whether you book a special bulk consolidator fare (which sometimes has different earning rates). If it’s just a regular, run-of-the-mill paid ticket, the payment method you use has no bearing on your redeemable or elite-qualifying earnings.

Thanks for the question, Ricardo, and if you’re a TPG reader who’d like us to answer a question of your own, tweet us at @thepointsguy, message us on Facebook or email us at info@thepointsguy.com.

Featured photo courtesy of Delta.