Thoughts on the Airline Reimbursement Perk from American Express

American Express just isn’t what it used to be.  (Ask your grandfather.)  Sure, there’s this lingering air of prestige* when you pull out the Platinum card, but there are plenty of cards licking at its’ heels.  You can make (and probably win) the case that a card like the Citi Prestige or the Chase Sapphire Reserve has already surpassed the Platinum.

Whether you win that argument with yourself or not, I find myself with an American Express Platinum card, so we might as well see how it works, right?

The card comes with a host of benefits.  I don’t want to bog down this post with all the details, but check out my post on the Platinum for a bit more information.

The airline benefit is one the best features of the card, in my opinion.  You have to select your airline in January, and you’re tied to that selection for the rest of the year.  However, if you need to switch your preferred airline, you’ll usually be able to select your new choice by calling up AmEx and chatting with a representative.  Once your airline is selected, American Express will reimburse any fees related to your airline of choice (up to a certain dollar threshold) every year.

Between the Platinum and the Premier Rewards Gold card from American Express, I have $300 worth of travel credit to use each year:  $200 on the Platinum, $100 on the PRG.  Since I have the Companion Pass for the rest of 2017, it makes sense for me to keep flying with Southwest at the moment.  I’ve flown almost exclusively Southwest for the last 12 months due to the Companion Pass, and I don’t regret a single trip!  My desire t save some money with the Companion Pass cuts down on options a bit, but man has it saved me some cash (and points!).

Big surprise, I’ve already used up all of the credit for this year!  With Southwest, the airline credits typically work for cheap tickets (I’ve seen as high as $103 for an actual ticket get credited), and you can use them for all those little $5.60 charges from the taxes and fees on domestic flights.  Keep in mind that the credit is only supposed to work for the taxes, fees, and other small charges, but plenty of folks have had good luck redeeming for actual flights on Southwest, which is not the case for every airline.

For this year, I’ve already got a number of flights booked:

  • BWI-BOS (I’ll be taking this one tomorrow night)
  • BOS-BWI-SJO
  • SJO-BWI-BOS
  • BOS-DEN
  • DEN-BOS
  • BOS-HOU-AUS
  • AUS-BOS

Seven flights on Southwest, and most of those have all three of us flying, so we’ve paid the $5.60 charge 21 times already this year.  If you do the math, that’s a total of $117.6, and you can see how those credits get used up so fast!

The flights to and from Costa Rica (SJO) take out a bit more than the domestic flights, due to the additional fees and exit taxes incurred by the typical international itinerary.

Long story, short, the credits are great!  I got to thinking though…I really wanted to know whether or not those reimbursed fees still earn extra Membership Rewards.  On airfare, you’ll earn five times the Membership Rewards on the AmEx Platinum, and triple Membership Rewards for swiping (or punching in) the Premier Rewards Gold.

When you login to your American Express account, the following page will greet you.

amex-welcome-page

You’ll want to hit “Available Points” over on the right side of the page.  As long as you have Membership Rewards earning cards, you’ll be able to dig down a bit deeper.

amex-points-overview

From here, you’ll see points earned on any card that contributes to your Membership Rewards bank.  Once you click the “+” next to the statement dates, you can find the bonus details, then you’ll be able to dig a bit deeper.

Premier Rewards Gold

The PRG earns triple points on airfare purchased directly from airlines.  Does it still earn triple points on reimbursed airline fees?

I had to wait quite some time to find out, since American Express posts rewards about a month after the statement actually closes.  They do, however, make it very easy to see where you’re earning extra points, as you can see below.

prg-jan-points

You’ll notice that not all of the transactions line up.  Theoretically, you should see a purchase at Southwest Airlines, and a matching reimbursement.  Some of the 6 point transactions had not yet been reimbursed on this statement, since it closed on the 6th of January.  There are 2 great examples though.  Towards the bottom, you’ll see two “-6″s in the Bonus column.  Above, you’ll see plenty of triple points (18) on the $6 charges.

What’s happening here, is that I’m getting the bonus triple points for airfare purchases, and then American Express is taking away a single point/dollar on the reimbursement (since I didn’t actually pay for anything).  When my next statement closes, I’ll see some more transactions subtracting points, since the reimbursements will be completed by the next statement close.

Essentially, I’m netting double points (instead of the usual triple) on airfare spending that’s reimbursed.  Since the airfare credit is worth $100, it’s almost like earning 200 points with no spend!  To keep that in perspective, 200 Membership Rewards are worth about $3.80.  But hey, free points are free points, right?

By the way, all those $6 transactions are those domestic Southwest taxes and fees:  $5.60.  Luckily for me, American Express rounds up!  Notably, if you’re booking a roundtrip, and the fees for those reward flights are $11.20…AmEx rounds down.  So two Southwest Rapid Rewards flights booked and paid for are earning you 12 points (6 + 6), while booking and paying for those same flights in one transaction will only yield 11 Membership Rewards (5.6 + 5.6 = 11.2, then rounded down to 11).  Although this isn’t the primary reason for booking Southwest flights as one-ways, it’s nice to have the extra point here and there!

Platinum

I had to wait two more weeks to see if the same thing occurred on my Platinum card, since the Membership Rewards points didn’t close until just a few days ago, on the 17th of February (just over a full month from the statement close date.

plat-jan-points

The same exact thing happened!

As you can see above, I earned 5x points on the Southwest airfare I’ve been purchasing recently.  Now, when AmEx reimburses me for the Southwest purchases with the annual airline fee credit, they’re only taking away 1x points, just like on my PRG.  That means I’m coming out with 4x points for money spent on flights (that I didn’t really spend!).

On a $200 airline fee credit, I’m getting:

$200 reimbursed airline spend x 4 Membership Rewards points = 800 “Free” points

Valued at 1.9 cents per point, those Membership Rewards are worth $15.20.  No, not a game changer, but definitely a nice bonus!


Although this information may not change your travel plans or spending habits, I thought some of the nerdier ones out there might find it interesting!  You aren’t going to accumulate a pile of Membership Rewards points this way, but I enjoy learning how credit cards work.  Hope you found it interesting!

*To be fair, I don’t think there should be any prestige associated with a card in your wallet.  Kind of materialistic, don’t you think?

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3 comments

  1. Well this is where it is different. In Singapore, our Amex co-brand card with Singapore airlines gives bonus miles each month on spend exceeding a certain level only. And we also get two pairs of vouchers to use airline lounges per year and a night’s complimentary stay in a hotel chain…so we think you folks still have it better!

    Like

    1. Interesting! I think the US definitely has some of the best credit cards and bonuses, but I always enjoy learning about the international offerings too

      Liked by 1 person

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