Among the perks of travel rewards credit cards are policies offering credits that can wipe out eligible charges from your statement. It’s like getting stuff for free! But right now, some credit cardholders are finding that their American Express credits are being taken back.
Customer claims on sites like Doctor of Credit and Reddit indicate that American Express is cleaning up its system of awarding travel credits for airline purchases offered on some of its cards. The clawbacks—the term for when a benefit that’s already been paid out is taken back—seem to be for reimbursements that were applied to ineligible purchases or to charges that were also refunded by the merchant.
For example, one Reddit user got an email from American Express stating that the Delta gift cards they purchased on their credit card weren’t eligible for the travel credit reimbursement; that user now has a card balance for the gift cards’ amount. This despite the fact that they made those purchases prior to the start of 2020.
Credit cards that offer travel credits automatically detect eligible purchases and issue a credit that basically wipes them out. Airline-specific charges for checked bags, seat upgrades and in-flight refreshments are typically reimbursed, but some cards offer the credit toward any travel-related purchase. Once you hit your travel credit cap for the year, it’s gone until your card renews (and you pay your annual fee).
The credits can be a big selling factor for cards with annual fees in the $300-$500 range, making the you feel like that fee isn’t quite so high.
But when you don’t have to submit those eligible purchases for reimbursement by your card issuer, it means you’re trusting the system to get it right every time.
Now that American Express seems to be closing loopholes in its system, affected customers don’t have a chance to earn back their travel credits from previous years. And in many cases, it means an old purchase could come back to haunt you in the form of a new or a higher balance on your credit card.
We’ve reached out to American Express for more information and will update this post when we hear back. In the meantime, if you’re worried about having your travel credits clawed back by your card issuer, here’s what to do.
Get familiar with your card’s restrictions
A card may tout a certain amount in statement credits for “eligible travel purchases” when you sign up, but that’s not enough knowledge to help you keep an eye on your account.
Check your card’s terms and conditions for the specifics for your card. That document will spell out what’s included and what isn’t (travelers checks and foreign currency are probably excluded, for instance). It’ll also explain how and when you’ll see your credit applied. In most cases, correct reimbursement will be up your card recognizing the category code for the merchant from which you made a purchase.
While you’re looking at the fine print, save it as a PDF and put it in an easy-to-find spot on your computer, or print a copy if you lost the one you received when you opened your card. You might be surprised how often you need to refer to it.
Check every statement
Once you know what’s eligible for a credit and what’s not, you can keep an eagle eye on each monthly statement. It can take some time for credits to reflect on your tab, so you may have to play a matching game between eligible purchases and credits to make sure they’re correct. You don’t get to pick and choose—it’s really first-come, first-serve as your card counts up toward that dollar amount—so don’t panic if you see some purchases you didn’t expect to be credited.
For instance, one of my rewards cards was quick to recognize my downtown parking garage fees as travel and proceeded to credit my account $4 to $10 at a time. But look, credits are credits. Everything lined up on my monthly statement, so it was fine.
If you do spot an issue—say, you purchased an airline gift card and know it isn’t eligible—you should contact your card issuer to report the error ASAP. They can adjust your account quickly so you don’t have to risk having your balance upturned later.
Don’t get excited about credits
If you’re in the market for a new card, don’t overvalue the power of travel credits. This action from American Express shows how volatile rewards can be: One change in the rules or an accounting error can put you at risk of your account winding up totally out of balance.
When you evaluate cards, think about whether you’d be just as interested without that couple-hundred-dollar travel credit. Are you still excited about the prospect of signing up? Go ahead. But if that travel credit was the thing drawing you in or helping you justify a high annual fee, just remember the “perk” could be changed or taken away altogether at any time.