What that 'free' airline award ticket will cost you
We compare the fees, other costs that go with flights bought with miles
By Tony Mecia | Published: May 28, 2015
The pitch for airline credit cards sounds enticing: Sign up, and earn a free trip.
But when you read the fine print, you'll see that a free trip isn't really free. When it comes time to cash in the miles you've earned, you're likely to shell out some money in the form of fees.
Just as airline rewards programs have grown, so has the propensity of airlines to charge for services that used to be included, such as handling checked bags. Award tickets don't include airport security fees. Some airlines tack on hefty fuel surcharges. And if you want to change or cancel your award ticket, be prepared to dig deep into your wallet -- those fees can run up to $200.
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"Reward tickets are not free," says Jay Sorensen, president of loyalty consulting firm IdeaWorks, which counts airlines among its clients. "Just because you are a member of a frequent flier program doesn't mean you're going to get everything for free. Airlines are for-profit entities, and they will attempt to charge a fee wherever they can because they need and want the revenue."
Sorensen notes that over the past couple decades, airlines have moved away from referring to the rewards as "free tickets" and instead refer to them as "award tickets," since the cost is rarely zero.
Still a good deal, but ...
To be sure, credit cards that earn customers frequent flier miles with every purchase can be a good deal. Sign-up bonuses alone on travel reward cards can be redeemed for flights worth hundreds of dollars and having an airline credit card can exempt you from certain fees.
On a new card, consumers typically need to spend a few thousand dollars in three months and can be rewarded with up to 50,000 frequent flier miles -- often enough for one or two round-trip domestic tickets.
Of course, most airlines limit availability on popular flights -- another potential downside that often goes unspoken in marketing materials.
"Almost everybody understands that when they talk about 'free tickets,' they are speaking in relative terms," says Tim Winship, editor of FrequentFlier.com.Not all frequent flier programs are equal. Here's how the major U.S. ones stack up, using the co-branded credit card with the lowest annual fee for comparison:
(1) According to May 2015 Switchfly Reward Seat Availability Survey. Seats were considered available if any were available at the lowest level on the dates searched. Note: Some fees are reduced or eliminated for elite-level frequent fliers or credit card holders.
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