The real cost of “free” rewards travel

You coughed up an annual fee for a card that promised free travel and spent a lot of time patiently banking miles. But, when it came time to book the trip, it wasn’t so free after all.

Unfortunately, various charges can get tacked onto rewards trips. While you may not be able to avoid them, it pays to be aware of them so that you can budget for them – or find a card that will help you cancel them out. Additional charges on reward travel

Taxes, fees and fuel surcharges on rewards flights

Your points may cover the cost of the flight itself, but they don’t cover all the costs associated with your flight, such as government-imposed fees. You’ll have to pay those fees yourself when you book your ticket. Here are Southwest’s terms as an example, but these are pretty standard across U.S. carriers:

Southwest taxes fees on rewards ticket

Another type of “free” ticket is subject to these fees as well – the companion ticket. For example, if you take advantage of the Delta Platinum SkyMiles card’s yearly companion ticket, “payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required,” according to the card’s terms and conditions.

Whether it’s a reward ticket or companion ticket, paying less than $100 for a ticket that costs hundreds of dollars is still likely a good deal. Things get trickier when you’re dealing with fuel surcharges, which can be much closer to (or more than) the cost of the tickets. If you’re booking with a U.S. carrier, you probably don’t have to worry about these. But if you’re booking a rewards fare with a foreign carrier, several-hundred-dollar fuel surcharges are common – and NOT included in the rewards fare. See British Airways’ terms, for example:

British airways fuel surcharges on reward flights

Fuel surcharges (which are generally charged on each segment of your journey) can add up. For example, take a look at the surcharges tacked onto this multi-stop Singapore Airlines fare:

singapore airlines fuel surcharges

If you’d booked this as a rewards flight, you’d still have to pay more than $500 out of pocket.

Resort fees on hotel rewards nights

Some properties automatically append a daily charge for use of their presumably superior facilities (such as the pool, gym, Wi-Fi and other amenities) in addition to your room rate. You won’t know until you get your itemized bill, because hotels are notorious about burying resort fees on their booking sites.

But are resort fees required for reward stays? The answer is a bit murky.

Hyatt discloses in its terms that the resort fee is the responsibility of the guest on reward nights at some properties:

resort fees on reward night Hyatt

And so does Marriott:

Resort fees on reward night marriott

Other chains remain mum on their websites. However, do a Google search for “resort fees on reward nights,” and you’ll find lots of forum discussions about resort fees getting charged or waived on rewards stays at various chains. Some guests even claim to have had resort fees waived at the properties that claim they DO NOT waive them.

So, best practices would involve being aware of resort fees and checking your bill. If resort fees appear on your bill and you’re on a rewards stay (and even if you’re not), ask the hotel if it can waive them.

Close-in booking fees

This one can be a particularly nasty surprise. Some airlines charge for reward bookings booked too close to the departure date. United, for example, charges $75 for reward itineraries booked fewer than 21 days before departure (although it reduces or waives them for those with elite status). American charges $75 also for itineraries booked less than 21 days in advance, but waives them for Executive Platinum, Platinum and Gold members.

This can be a problem for anyone waiting for last-minute reward space to open up. However, $75 might be a price you’re willing to pay for a ticket that might otherwise cost hundreds or even thousands of dollars.

How to cancel out these extra costs

If you don’t have status with the airline or hotel and can’t negotiate the fee away, consider having a card in your arsenal that can make it disappear.

Generic travel rewards cards allow you to apply your points toward travel purchases, which includes charges from travel providers (such as airlines and hotels). In general, generic travel rewards points are worth 1 cent each. So, if you were charged $50 for government fees by the airline, you could use 5,000 points to cancel that out.

Often, regular cash-back cards allow you to redeem for statement credits, so you can accomplish the same thing.

Generic travel rewards cards that let you vacuum up stray fees include the Barclaycard Arrival+ ($89 annual fee) and its no-annual fee version, the Capital One Venture and the Discover it Miles.

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