Airline Card Turmoil: What's a Traveler to Do?

Recent news highlights the instability that can sometimes plague airline credit card partnerships. When an airline faces financial headwinds, as Spirit Airlines is currently experiencing, it can impact its credit card offerings. While this particular instance involves a lesser-known card issuer, Mercury, it serves as a crucial reminder that airline card relationships aren't always permanent.

RewardSmart Tip: Diversification is key. Don't put all your eggs in one airline's basket. Holding credit cards from multiple airlines, or better yet, flexible travel cards that earn points transferable to various partners, can insulate you from potential disruptions. Cards like Chase Sapphire Preferred or Amex Membership Rewards cards offer this valuable flexibility.

Amex Purchase Protection: A Loss of Coverage

American Express has quietly removed lost item coverage from the purchase protection benefit on many of its cards. While purchase protection still covers damage and theft within a specified timeframe (typically 90-120 days from purchase), the exclusion of lost items is a significant reduction in value.

RewardSmart Analysis: This change makes it even more critical to understand the terms and conditions of your credit card benefits. Don't assume that a benefit you previously enjoyed is still in place. Regularly review your card's guide to benefits, which is often accessible online or through your card issuer's app.

RewardSmart Tip: If you frequently rely on purchase protection for lost items, consider other strategies. For example, personal property insurance may offer broader coverage. Also, document your purchases and keep receipts organized. While this won't replace the lost item protection, it will help with theft or damage claims.

Actionable Steps for Reward Maximizers

  1. Review Your Portfolio: Take stock of your airline credit cards. Are any tied to airlines experiencing financial difficulties? Consider diversifying your spending to cards with more stable partnerships or transferable point programs.
  2. Understand Your Benefits: Download the benefits guide for each of your Amex cards and carefully review the purchase protection terms. Note the exclusions and coverage periods.
  3. Consider Alternatives: If you relied on Amex's lost item protection, explore alternative insurance options or adjust your spending habits to minimize the risk of loss.
  4. Maximize Bonus Categories: Focus on maximizing bonus categories offered by your existing cards. Shift spending to cards that offer higher rewards for categories where you spend the most.
  5. Stay Informed: Keep an eye on RewardSmart for updates and analysis of credit card benefit changes and airline industry news. We'll help you navigate these changes and optimize your rewards strategy.

RewardSmart Takeaway: These changes highlight the importance of being a proactive credit card user. Don't take benefits for granted – stay informed, diversify your rewards strategy, and adjust your spending habits to maximize your rewards in a constantly evolving landscape.