Why is there such a big surcharge to book my 'free' flight with points?

Some airlines impose hefty fees, others don't

Cashing In with Tony Mecia

Tony Mecia is a business journalist who writes for a number of trade and general-interest publications. Every week, he answers readers’ questions about credit card rewards programs in his “Cashing In” column.

Ask Tony a question, or see if your question has already been answered in the Cashing In answer archive.


The content on this page is accurate as of the posting date. Please review our list of best credit cards, or use our CardMatch tool to find cards matched to your needs.

I want to use my American Airlines points to book a flight to London, but why are there so many fees?

American Airlines’ partner airline, British Airways, imposes larger surcharges on international flights than other major carriers. To save some money, make sure you book an American flight through American Airlines’ website, instead of British Airways’ where the fees are steeper.

 
Expert Q&A

Check out all the answers from our credit card experts.

Dear Cashing In,
I got a new credit card that gave me a bunch of American Airlines frequent flyer miles. Now I want to use them to fly to London. But when I go to get them, a lot of times, it includes hundreds of dollars in fees. That makes it seem like not such a good deal. Is there anything I can do to avoid those fees? – William

Dear William,
Airlines like to advertise their frequent flyer programs as giving “free” tickets to customers who accumulate enough miles. But oftentimes, that “free” ticket winds up being not so free after all.

First, that ticket is never actually free. You are always incurring some cost for it. If you accumulated a lot of miles from a credit card, then you have probably paid an annual fee and also have some spending on the card that earned you the miles. If you accumulated the miles from flying, that’s because you paid for tickets.

Charges tacked on to award tickets

Also, there are always charges associated with the award ticket. In the U.S., airlines cover the cost of the fare when you pay with miles. But you are still responsible for federal security charges ($5.60 each way) and perhaps airport fees. Those wind up being minimal, but they’re still not free.

Things get complicated when you start booking international award flights. A little more than 10 years ago, airlines started adding fuel surcharges to offset the rising cost of fuel. Oil prices subsequently fell – but the airlines never dropped the charges. They did change the name of the fees to “carrier-imposed surcharge” or something similarly vague. Foreign airlines are especially aggressive about charging the fees.

Certain airlines charge more

These fees can be steep: hundreds of dollars, in many cases. And they can apply even when you use frequent flyer miles from U.S. airlines. For instance, if you wanted to fly in October from Philadelphia to London using American frequent flyer miles, one option is to fly on partner British Airways at a round-trip cost of 60,000 miles and $529.51. Not a great deal.

By comparison, if you used those miles on an American flight between the same cities, it costs 60,000 miles and $188.41.

The key is understanding when those fees apply and working to avoid them. The most common times you’ll encounter a steep surcharge are:

American: Using American miles on British Airways or Iberia
Delta: Using Delta miles on a handful of minor partners (Aeroflot, China Eastern, etc.)
British Airways: Using British Airways miles (Avios) on British Airways flights 

That means that you are in the clear most of the time. United does not impose these surcharges, and they are rare on Delta.

See Related: Beware change fees with award flights

Tip

Tip: United does not impose surcharges and they are rare on Delta.

If flying American, make sure you are on American and not British Airways or Iberia. There are other places you might encounter these big charges, mostly with foreign airlines. They are much less reticent to pass those charges along. Of course, these fees negate the value of award tickets.

With oil prices rising again, it will be interesting to see if airlines revisit these policies and make these charges more widespread. If so, the idea that a frequent flyer ticket is “free” will become even more incorrect.

See related: Airline credit cards


Join the discussion
We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.




Weekly newsletter
Get the latest news, advice, articles and tips delivered to your inbox. It's FREE.


Updated: 12-12-2018