If you wish to transfer American Express Membership Rewards factors to a U.S. airline, chances are you’ll run right into a pesky expense: the excise tax offset payment.
This solely applies to transferring your Membership Rewards factors to home airways. Nonetheless, there are nonetheless strategies to e book home flights together with your factors with out paying the payment.
Here is what that you must know.
What’s an excise tax, and the way does Amex cost for it?
In line with the IRS, excise taxes are “imposed on sure items, providers and actions,” together with transactions associated to loyalty packages.
You will usually see them when buying factors or miles immediately from airways, however additionally they come into play with transferable points.
To account for these taxes, American Specific imposes an “excise tax offset payment” when transferring Membership Rewards points to a U.S. airline’s loyalty program.
Here is the way it’s described on Amex’s web site:
“For every conversion of factors into the Frequent Flyer program of a U.S. airline, a payment of $0.0006 per level, with a most payment of $99, shall be charged to your Card account. We cost this payment to offset the federal excise tax we should pay on such conversions. The payment could also be roughly than the precise quantity of the excise tax we pay on any particular person conversion. We might give you the choice to redeem factors to cowl this payment.”
As famous, this payment applies solely to U.S. airways’ frequent flyer packages. For Amex, this consists of two packages:
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Transfers to resort companions and worldwide airline packages should not charged this payment.
Associated: How to redeem American Express Membership Rewards points for maximum value
What does the excise tax offset payment appear like?
In case you select to switch your factors to a U.S. frequent flyer program comparable to Delta SkyMiles, Amex will immediate you with an excise tax offset payment.
On this instance, you will have to pay a $30 payment to switch 50,000 Amex factors to Delta SkyMiles. It’s also possible to use your factors to cowl the excise tax offset payment, however this is not an excellent use of your hard-earned rewards.
Through the use of 6,000 factors to keep away from the $30 payment, you will redeem every level at simply half a cent apiece, or 1 / 4 of our April 2026 valuation of Amex factors.
Associated: What are American Express Membership Rewards points worth?
The way to keep away from the payment
As famous above, this payment is just charged on transfers to 2 of Amex’s switch companions. In case you convert your Membership Rewards factors to a resort program’s forex, there is no payment.
However most significantly, this payment is just not charged for transfers to worldwide airline loyalty packages — and you’ll usually use these to e book home flights.
For instance, if there’s award availability, you should utilize Air France-KLM Flying Blue or Virgin Atlantic Flying Club factors to e book home flights operated by Delta Air Traces.
Lastly, it is price noting that no different transferable factors program costs a payment for these transfers. When you have Capital One miles, Chase Ultimate Rewards points or Citi ThankYou Rewards points, for instance, you’ll be able to switch them to JetBlue with none extra cost.
Associated: How to search flight award availability for the major airlines
Backside line
In case you plan to switch Membership Rewards to Delta SkyMiles or JetBlue TrueBlue, bear in mind to issue within the excise tax offset charges into the general price. Be sure you pay this payment together with your American Express card, as redeeming Amex factors on this means is just not an excellent use of your rewards.
In any other case, keep on with resort or worldwide loyalty packages, as that is one of the simplest ways to maximise your Membership Rewards factors.
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