Buzz
One of the appealing features of travel rewards credit cards is their ability to offer credits that can cancel out eligible charges from your statement. It's as though you're receiving free benefits! However, some credit cardholders are now noticing that their American Express credits are being revoked.
Customer reports on platforms like Doctor of Credit and Reddit suggest that American Express is refining its system for issuing travel credits on airline-related purchases made with certain cards. These 'clawbacks'—a term referring to benefits already issued but later rescinded—are happening when reimbursements are applied to ineligible purchases or when charges are simultaneously refunded by the merchant.
For instance, one Reddit user received an email from American Express stating that the Delta gift cards they bought on their card weren’t eligible for a travel credit reimbursement. Now, the user faces a card balance for the gift card charges, even though the purchases were made before 2020 began.
Credit cards that provide travel credits automatically identify qualifying purchases and apply a credit to effectively erase them. Typically, charges for airline-related expenses such as checked bags, seat upgrades, and in-flight meals are reimbursed, though some cards extend the credit to any travel-related spending. Once you reach your travel credit limit for the year, that’s it until your card renews (and you pay your annual fee).
The travel credits can be a compelling selling point for cards with annual fees in the $300-$500 range, making the fee feel less burdensome.
When you don’t need to submit eligible purchases for reimbursement from your card issuer, it means you’re relying on the system to ensure accuracy every time.
Now that American Express appears to be tightening its system, impacted customers won’t have the opportunity to reclaim their travel credits from previous years. In many cases, this means an old purchase could resurface as a new or higher balance on your credit card.
We’ve reached out to American Express for further details and will update this post once we receive a response. In the meantime, if you’re concerned about having your travel credits reversed by your card issuer, here’s what you should do.
Understand your card’s limitations
Your card might advertise a certain amount in statement credits for “eligible travel purchases” when you first sign up, but that’s just the beginning—it's not enough to truly monitor your account.
Review your card’s terms and conditions to get the full details. That document will outline what is and isn’t covered (for example, travelers checks and foreign currency are likely excluded). It will also clarify how and when the credit will appear on your account. In most cases, accurate reimbursement depends on your card identifying the correct merchant category code for your purchase.
While you're reviewing the fine print, save it as a PDF and store it in a spot that's easy to access, or print a copy if you've lost the one you received when you first got your card. You’ll be surprised how often you’ll need to refer back to it.
Examine each statement
Once you're familiar with what qualifies for a credit and what doesn’t, you can carefully monitor each monthly statement. It may take some time for credits to appear, so you might have to match up eligible purchases with the credits to ensure they're accurate. You don’t get to choose which purchases are credited—it’s really a first-come, first-serve situation as your card balances out the total. So, don’t worry if you see some unexpected credits on your account.
For example, one of my rewards cards quickly recognized my downtown parking garage fees as travel-related and credited my account in increments of $4 to $10. But hey, credits are credits. Everything matched up on my statement, so it worked out just fine.
If you spot an issue—like buying an airline gift card that you know isn’t eligible—you should reach out to your card issuer immediately to report the mistake. They can correct the issue quickly, saving you from facing a potential balance discrepancy down the line.
Don’t Get Too Excited About Credits
If you're shopping for a new card, be careful not to place too much value on travel credits. This recent move by American Express highlights how unstable rewards can be: A simple rule change or a mistake in accounting could leave your account completely out of balance.
When assessing credit cards, consider whether you would still be interested without that tempting couple-hundred-dollar travel credit. Are you still excited about the opportunity to sign up? If so, go for it. But if the travel credit is what really enticed you or made a high annual fee seem worth it, remember that this “perk” could be modified or entirely removed at any time.
