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Travel News

Airline perks and fees – giving with one hand and taking away with the other

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Written by editor

The ever-changing world of airline fares and fees is getting a little more confusing — but maybe a lot cheaper — thanks to the newest travel perk: free baggage check with an airline’s credit card.

The ever-changing world of airline fares and fees is getting a little more confusing — but maybe a lot cheaper — thanks to the newest travel perk: free baggage check with an airline’s credit card.

Continental Airlines introduced the benefit last fall on its Chase credit card, followed by Delta with its premium Skymiles American Express card. Both cards waive the fee for a flier’s first checked bag — a $50 charge on a round trip — for up to nine people traveling together on the card member’s reservation.

It sounds like a good deal, but there’s a catch: another fee. In the case of Continental, it’s the $85 annual fee for the OnePass Plus card, and for Delta it’s $95 for the Gold Skymiles card.

“They’re giving with one hand and taking away with the other,” said Daniel Ray, editor in chief of the CreditCards.com card comparison site.

PERKS FOR PEEVED FLIERS

Ray said he expects other airlines to follow suit as carriers look for more ways to retain customers while piling on fees for everything from aisle seats to pillows. At the same time, he noted, many credit cards that offer air miles are paring those rewards, while airlines are making it harder to claim free flights for frequent fliers.

By adding the baggage perk, these airlines and card issuers can offset reductions while persuading cardholders to pony up the added annual membership fees. The branded cards also build loyalty to the airline and the card issuer, keeping cardholders from jumping to grab new offers from other issuers.
“It’s a way of making these reward cards different by making them more attractive but charging a fee on the front end,” said Bill Hardekopf, CEO of another card site, LowCards.com. “Card issuers are raising more money by getting annual fees, and they’re using the rewards as an add-on to justify the fee.”

The cards offer other benefits, such as ticket discount certificates or a few VIP lounge passes each year. For even heftier fees, fliers can get more perks. On Delta Skymiles, for example, upgrading to the $150 platinum card adds a certificate for a free companion ticket each year.

KNOW YOUR TRAVEL NEEDS

Whether these benefits are worth the extra bucks depends on how you travel, said Tim Leffel, author of “Make Your Travel Dollars Worth a Fortune,” who uses the Continental card.

“It turned out to be a better deal than I thought. Checking your first bag free is a huge thing if you’ve got a family,” Leffel said. “It’s great — if you can use it.”

And that’s the big question. If you’re packing light and getting by with a carry-on, a waived baggage fee isn’t worth much. And if you don’t travel with luggage often enough — maybe once every other year — it’s cheaper for one or two travelers to pay the baggage fees instead of shelling out for annual credit card memberships.

“If it costs you $25 per bag per leg, that’s 100 bucks on two tickets,” Hardekopf said. “So if you pay an $85 fee to get that waived, it might be worth it.”

It could be worth it to a lot of folks. According to the Bureau of Transportation Statistics, from October to December, U.S. airlines collected $736 million in baggage fees. At the top of the list was Delta, which collected more than $131 million, with another $80 million nabbed by Northwest Airlines, which merged into Delta in 2008.

The addition of baggage fees has made it harder for consumers to shop for fares, said Edward Hasbrouck, author of “The Practical Nomad: How to Travel Around the World.”

“The airlines are making the real price of a ticket more and more opaque,” Hasbrouck said. “Because they’re charging for things that used to be free, it’s a way of raising prices without having an overt raise in the fare.”

IT’S ONLY WORTHWHILE IF YOU USE IT

Before paying for any air travel perks, check the fine print of the programs against your own approach to see if you’ll really benefit, said Ray, of CreditCards.com. For example, on Delta, if a cardholder uses frequent flier miles or companion tickets for his group, the reservation will split into separate numbers, making some of the group ineligible for free baggage.

“Your travel needs are going to vary, so be aware of your own travel patterns and find a card that matches it,” Ray said. And keep an eye peeled for new card offers, since most card experts say they expect free bag check and similar perks to show up on other airline cards and to eventually migrate to non-airline card offers.

Another benefit to getting the bag check perk is it eliminates the hassle of prepaying the fee online to gain a small discount, or of having to hand over a credit card when checking in at the airport.

“What they’re doing,” said Leffel, “is annoying everybody to death with fees, then saying, ‘If you pay us enough for this card, we’ll let you off the hook.’ ”