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Today’s topic is all about an airline credit and how it works.

Flight Cancellations

Many travellers have had their flights either changed or cancelled. If your flight is cancelled you are entitled to a full refund to your original form of payment or you could accept an airline credit towards a future use without any change fees. Whenever you have the option between the two, ALWAYS take the full refund. If your flight is changed or you wish to not travel, many airlines are currently offering waivers for change fees – they will allow you to postpone your trip by cancelling your flight and giving you an airline credit to use for future travel without any change fees.

What is an Airline Credit?

An airline credit is simply an electronic voucher with a value and terms/conditions attached to it. Usually these terms and conditions include things like that the voucher is not transferable to others, expires at a certain date, etc. When you originally book your flight, you are issued an electronic ticket with a ticket number – once you cancel your booking and decide to accept the airline credit, your ticket is temporarily put on hold and the value is retained – you can then use the value of the ticket towards the purchase of a new trip.

Essentially an airline credit is your original ticket which is un-flown and therefore still has value attached to it. When you book your next trip, this ticket is reissued to a new series of flights with a different itinerary – the value of the original ticket is applied to the cost of the new ticket. If your new flight costs more, you can usually pay the difference with a credit card. If your new flight costs less, you either forfeit the remaining value on the original ticket or some airlines will issue you a new credit for the remaining amount.

Airline Credit Use & Terms and Conditions

Each airline sets their own terms and conditions for airline credits. However, there are usually general rules that most airlines follow, which can include the fact that the ticket/credit is not transferable to anyone else, expires one year from the date of original issue, can only be used on certain routes/flights, there may be additional change/rebooking fees, etc.

For example, if you purchased a ticket for $150 and decided to convert that into an airline credit as you do not want to fly right now, you have a year from when you originally purchased the ticket to use up this credit (this is why you should always take a full refund instead of a credit if you have an option – as a year might not be enough time). Say your new flight costs $200 – you would apply the value of your original ticket to the new booking and then just pay the remaining $50 with a credit card and there would be no additional change fees. If you end up changing or cancelling this new booking for another credit – keep in mind that the ticket/credit still expires a year from when it was first issued – which would be the very first date you purchased the original reservation.

A full refund is always better as those funds are returned directly to you and you aren’t locked in to a specific airline with a specific credit, however full refunds are usually only possible if your flight was cancelled or significantly delayed – nevertheless, it never hurts to ask for a refund – some airlines are way more generous than others. It is important to check all of the rules of your booking and future credits with your airline since they all might have slightly different policies on credit issuance and future use.

In Conclusion

Airline credits can be useful, however they can restrict you greatly – you usually have to use them within a year from when the original ticket was issued and you can’t transfer them to others, with other possible restrictions applying. Some airlines allow you to rebook as many times as you want without fees while others only allow you to rebook once free of charge. When you go to cancel your flight into a credit, you usually have the option to save your ticket numbers for future use or rebook right away – if you don’t know your new travel dates, do not rebook and instead save the ticket numbers and simply call the airline when you are ready.

Travel Miles 101 has partnered with CardRatings for our coverage of credit card products. Travel Miles 101 and CardRatings may receive a commission from card issuers.