How Much Are Airline Rewards Really Worth? Biden Admin Probes Credit Card Programs
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White House officials and regulators are probing what they say are issues with airline credit card programs, including the devaluation of points, high interest rates and the stripping of travel benefits.
Americans tend to have a love-hate relationship with airline credit card programs: Putting day-to-day spending on these cards can feel like an easy way to earn quote-unquote “free” trips — and the perks can make air travel a more luxurious experience — but officials say they’ve heard a laundry list of consumer complaints about how these programs are structured and operated.
Credit card and airline reward programs have ballooned in popularity in the last few years amid the post-pandemic rebound in travel: According to one estimate, roughly 30 million Americans have airline credit cards that generate $23 billion a year. Secretary of Transportation Pete Buttigieg tells Money that for some big airlines, the profitability of these programs now “rivals or exceeds that of actually flying planes.”
Consumers increasingly think of their rewards balances as part of their savings, he says, but what those points are actually worth — both now and in the future — is unclear.
“A lot of us build up our savings in our points accounts just like we do in our cash accounts. But unlike a bank account, your points or miles have a value that could be changed overnight by a company,” Buttigieg says.
