Many people choose to redeem their credit card rewards points for travel. This can be an excellent way to check off a bucket list destination and take an incredible vacation. While you can book many high-value trips with credit card points, it’s essential to know that award flights aren’t 100% free. That’s because you’ll be responsible for paying taxes and fees. Keep reading to learn more.
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Understanding award flight taxes and fees
When you book award flights, you’ll exchange your accumulated points for an airline ticket. While your points may cover the ticket cost, there are still taxes and other fees like fuel surcharges to consider.
These fees can vary depending on the country in which your trip starts. For example, if you’re flying within the United States, you’ll pay a security fee of $5.60 each way or $11.20 round-trip for an award ticket. These set fees are government-imposed September 11th security fees that went into play in 2014.
If you’re traveling internationally, the fees can vary from country to country, and it also depends on which airline you’re choosing. Some carriers charge a lot more than others. While you can book award tickets that are nearly free, you should always expect to pay some taxes and fees, so you’ll need to have a credit card ready at the time of booking.
How to prepare for these fees
Before redeeming rewards and booking an award flight, it’s in your best interest to calculate taxes and fees. You can do this by doing a mock checkout process with the airline. Add your award flight details and take note of the taxes and fees that are listed.
You’ll get a better idea of whether a particular award flight is worth the points that you’re using or whether you should choose a different route with a higher value. You can play around with different routes and different airlines to see what flight works best for you. If the fees are too high, it may make more sense to book the airfare with cash and choose a different award ticket.
If you plan to transfer your points from a rewards program like Chase Ultimate Rewards to an airline rewards program, always check the taxes and fees first. This way, you’re maximizing the value you get out of your points, and you’re not stuck using your points with an airline that charges higher fees.
Yes, rewards flights are kind of free — but they aren’t 100% free. As long as you’re aware of this before redeeming travel points, you can strategize to find a flight with low taxes and fees.
Are you looking for a new credit card with a significant sign-up bonus so that you can book a fantastic award flight? Take a look at our top rewards credit cards list to see which cards offer the most sign-up bonus points. Then, you can get to planning your next adventure!
View more information: https://www.fool.com/the-ascent/credit-cards/articles/heres-why-award-flights-arent-100-free/