What’s the price of a travel credit card headache? ‘Free.’

By | January 9th, 2016

Charles Stewart figures he should have known better. The promises made by his MileagePlus Explorer card from Chase — yes, the one that’s heavily promoted in airports and on travel blogs — looked too good to pass up.

“In order to qualify for the free bag check and priority boarding, the ticket must be purchased directly from United via its Web page,” Stewart says. “I never noticed that. Seems to me that in order to impose such a limiting condition on a promised benefit, United should be required to disclose it more prominently.”

A United representative says Stewart misunderstood the offer, and that the “free” bags are indeed available for online bookings, even if they are made through an online travel agency like Expedia or Orbitz. If nothing else, Stewart’s experience underscores the complexity of these cards.

Stewart isn’t just another traveler with buyer’s remorse, having applied for a credit card only to realize that it came with clauses that made it “limiting.” As a retired tax attorney from Silver Spring, Md., he specialized in ferreting out the fine print. He figures that if he was deceived, other travelers will be, too.

They are. You don’t have to look far to find people who were disappointed, if not duped, by the claims made by their travel credit cards. Offering such perks as “free” bags and “free” airline tickets, these cards are big on promises, but they often fall short on the delivery. And although these financial instruments are legal, experts say they are not always worthwhile.

When Joan DePalma, a retired social worker from New York, applied for a Delta-branded American Express card recently, a representative offered her a $50 credit after her first purchase and 25,000 miles — enough for a “free” domestic round-trip ticket.

“When I received the card, I was refused the credit and the bonus mileage,” she says. The reason? She already had another Delta American Express card, and the offer was limited to first-time applicants.

“I’m canceling the card,” she says.

Drew Macomber, who runs a blog called Travelisfree.com that helps frequent fliers use credit cards to earn miles, says the fine print can be a minefield. Even though he studies these credit card offers’ terms and conditions, “this stuff gets confusing to me.”

He adds, “It’s impossible to figure out how to use, and use well.”

Among his favorite “gotchas” are offers for “free” companion tickets that stipulate the first ticket must be an unrestricted economy-class ticket, which is often double or triple the cost of a regular economy-class ticket. That’s right: It’s cheaper to buy two regular coach tickets. Go figure.

Other “free” companion tickets are restricted by destinations. For example, a Lufthansa offer is limited to tickets departing from the United States to Europe, the Middle East, Africa and the Far East. It also must be on a Lufthansa flight — no code-sharing.

Oh, and those “free” award tickets you earn from a credit card may not include fuel surcharges, which can really add up. A recent “free” British Airways ticket cost more than $700 in fuel surcharges.

“You’ll often find flights to the same destination for cheaper than the fuel surcharges,” Macomber says.

Some of the worst misrepresentations are the half-truths told by flight attendants eager to foist credit card applications on hapless passengers, says Rocky Horan, who writes for a frequent-flier blog called Upgrd.com.

Last week, for example, Horan found himself on a flight on which attendants were trying to sell credit cards that offered a 50,000-point bonus.

“The flight attendants told everyone on board that 50,000 miles was enough miles for two tickets to the Caribbean,” he says. That’s true — sometimes. Usually, the tickets cost 70,000 round-trip. The 50,000-mile tickets “were restricted to just a few weeks a year,” he adds. Anyone not familiar with the airline’s award chart would have been misled.

Robert Harrow points to the small print on the Citi Expedia card, which offers a way to quickly collect enough points for a “free” flight.

“However, any flights booked using points can’t be changed or canceled,” says Harrow, a research analyst for ValuePenguin.com, which helps consumers make personal finance decisions. “If, for whatever reason, you can’t make the flight, you will have lost all the points you accumulated.”

Oh, and one other thing. “Free ticket is really a misnomer,” he adds. The tickets come with service fees, taxes and other restrictions. In the end, they can cost more than a discount ticket. So when you hear the word “free,” watch it.

Loyalty-program expert Bill Hanifin, chief executive of Hanifinloyalty.com, coined the term “loyalty asterisk” to define these complex and confusing cards. He says that although these two-for-one and “free” ticket offers are not illegal, they can be difficult to decipher. “Unfortunately, the complexity of the financial models behind these programs is enough to mandate the asterisks in the copy,” he says.

Yes, they’re legal. But maybe it’s time for the Consumer Financial Protection Bureau to say, “Enough is enough.”

This story first appeared Aug. 19, 2015.

  • sirwired

    Cash rewards cards FTW. I just got myself a citi double cash card… 2% cash back on everything, no special categories to keep track of, no shifting points program, no hassle.

    On the actual story… I don’t blame amex for not handing out a second bonus to somebody that already had a Delta amex. It’s obviously a sales incentive to attract new customers, not something that they are going to hand out repeatedly to the same person.

  • MarkKelling

    Since this is a recycled article, it is possible that a lot of the issues mentioned have been corrected.

    For example, the United card info now simply says you have to a) use the credit card to pay for the flight b) provide your United frequent flyer number to United before the flight and you get your no extra charge checked bag.

    And the British Air offer is acceptable to me. Sure I had to pay $700 in fuel surcharges and the outrageous taxes that the UK charges for arrivals at LHR, but the ticket in business class would have cost me $9500.00 if I didn’t use miles! I think an $8000+ savings on a single flight is perfectly fine. And that I would have to pay all of the fees and taxes were clearly spelled out on the BA website.

    No matter what the program is or what the benefits are, you can always find someone who feels wronged. I am not saying that all of these offers are great or even worthwhile, but you just have to go in with your eyes open and you will find benefit in many of them.

  • Jadeveon Clowney

    I’m doing 6 flights on BA this summer — all Business Class — including two legs transatlantic — for a grand total of $650, thanks to points earned on my credit card. You can’t tell me these reward miles aren’t worth anything!

  • Bill___A

    I went to the website to learn about the “Mileage Plus Explorer card” These things are made clear. Admittedly there are certain ways you have to do things in order to get benefits. It is no different than a hotel chain requiring you to use their booking site to get free internet. Part of anything is figuring out the implications and methods that suit you the best. It is too bad he missed these issues, but they are there.

  • KanExplore

    Macomber is also an expert on how to get the right cards and use them well. The flavor of his blog is hardly one of bashing cards in general, but rather of making smart choices. The United MileagePlus Explorer card works fine for some people – it has perks, lots of points possible, which I use quite successfully to book trips. Yes you benefit from doing some study and comparisons, but credit cards can be very rewarding.

  • Inquirer1111

    I’m not sure I understand why Stewart got duped. Where did he buy his United ticket? I had a United Mileage Plus Explorer card and I always knew that I had to use the card to buy the tickets to get the free bags. I always use Yapta which directs me to the United site. In the article, the United rep said one can use Orbitz or Expedia. So where did Steward buy his tickets such that he didn’t free bags? Also, regarding the Delta American Express, I knew that you had to be new – that’s pretty up front. I already had a corporate Amex, and called, and they told me I could still get the bonus.

  • Noah Kimmel

    the amex one is also interesting because I have seen it displayed on the website, and when you call Amex the agent usually reads you a disclosure that they wont let you ask them to skip that says you wont get the bonus if you have this or other DL cards now or within last 12 months.

  • sirwired

    How much money could you have recovered from a Cash Rewards card with that level of spending?

  • Charles

    The ticket may have been bought for him. I often travel for business and those tickets are always purchased by someone other than me. For Delta it does not matter; I get the free checked bag. For United it does. That was a surprise for me the first time I tried to use it.

  • TMMao

    Sometimes, OTAs will have better fares than United’s own website, and UAL does not price-match them. I’ve found that if the OTA charge on my credit card statement shows as United Airlines, then the free bag is automatically added to the reservation. If the OTA charge shows as the OTA’s merchant name, then there could be an issue with the free bag allowance. For the few times that occurred, a copy of the travel itinerary showing my United Explorer card was used to pay for the ticket usually convinces the check-in agent to waive the baggage fee.

  • Jadeveon Clowney

    No idea. I don’t do weird or excessive spending with my BA card. I just use it to buy ordinary, everyday stuff. The miles add up.

  • liveone

    I think sirwired has a valid point. From all the calculations I have done, I always find that a straight cash back card beats a dedicated airline rewards card. To be fair though, I have not analyzed the BA card yet.