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One of the best perks for several American Express credit cards has been the ability to purchase airline gift cards and activate the airline incidental credit. Cards like the Platinum Card, Gold Card, and the Hilton Aspire all come with hefty annual fees that can be offset by their airline travel credits of $200 or $100.
The ability to use these credits to purchase gift cards makes it easier than ever to offset the annual fees and thus makes the cards more valuable.
However, it looks like there have been some unwanted changes when it comes to purchasing American Airlines gift cards with American Express credit cards.
Recent data points are showing that as of about February 6, purchases of American Airlines gift cards are not triggering the airline incidental credit. The purchases seem to be coding as gift cards which are of course explicitly excluded from the terms and conditions.
It is possible that this is a temporary change and that things will eventually go back to the way that they were before. This change could take a short amount of time to happen or it could take a very long time — this is not the first time that we have seen changes with respect to the crediting/coding of the gift card purchases.
However, as credit card rewards have exploded in popularity it is very possible that American Express reached a breaking point of sorts when it came to these annual credits that people started to use right after the turn of the new year. If that is the case then we may not see the change reversed because there could be a profitability issue.
There are also some reports the people having issues getting reimbursed when purchasing gift cards for other airlines such as Delta and Southwest Airlines. Some of those could merely be processing delays, however, so it’s not clear to me yet that those other airlines are affected, but it is definitely something that I will keep my eye on.
In case you need a refresher on what qualifies as a valid purchase for the airline credits here’s the list:
American Express officially states that the following qualify for the airline credit:
- Checked baggage fees (including overweight/oversize)
- Itinerary change fees
- Phone reservation fees
- Pet flight fees
- Seat assignment fees
- In-flight amenity fees (beverages, food, pillows/blankets, headphones)
- In-flight entertainment fees (excluding wireless internet because it’s not charged by the airline)
- Airport lounge day passes & annual memberships
The following items are explicitly excluded:
- Airline tickets
- Mileage points purchases or mileage points transfer fees
- Gift cards
- Duty–free purchases
- Award tickets
Qualifying airlines include:
- Alaska Airlines
- American Airlines
- Delta Airlines
- Frontier Airlines
- Hawaiian Airlines
- JetBlue Airways
- Spirit Airlines
- Southwest Airlines
- United Airlines
Read more about the credit here.
It appears that this is yet another negative blow to the value of some great credit cards. Being able to offset the annual fee for these cards with gift card purchases was a very popular way to justify paying the annual fee. If in fact purchasing gift cards does come to an end it is going to affect the value proposition of these cards for a lot people. Hopefully these are not permanent changes but at this point it’s not looking very good, at least not for American Airlines.
Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.