Enjoy the frequent flyer miles you rack up by using airline-branded credit cards? Major airline and aircraft industry stakeholders are warning the days of those rewards cards could be numbered if a Senate bill aiming to reduce credit card fees and increase transparency becomes law.
Major airlines, aircraft manufacturers and aviation unions sent a letter to U.S. senators claiming the Protect Your Points Act of 2024 (S.5272), sponsored by Dick Durbin (D-Ill.) and Roger Marshall (R-Kan.), could sharply reduce air travel and negatively impact tourism, according to a report from Reuters.
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Signers of the letter include American Airlines, United Airlines, Southwest Airlines, Boeing, Airbus, RTX (formerly Raytheon Technologies Corporation) and GE Aerospace, according to the report.
Durbin has said the measure would save merchants and consumers approximately $15 billion annually for such credit card transactions. Reuters said the letter from the industry stakeholders indicated that more than 31 million Americans hold airline travel reward cards and that 57% of all frequent flyer miles and points issued in 2023 were generated by them, with nearly 16 million domestic award points earned through airline-branded credit cards in the same year.
Details of the Protect Your Points Act
Durbin said the Protect Your Points Act only seeks to bring more transparency to airline-branded credit cards so they “do not bait and switch consumers by offering them an enticing rewards program, only to downgrade points or miles value without notice.”
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According to Durbin’s website, the bill would give the Department of Transportation and the Consumer Financial Protection Bureau the power to do the following:
- Prohibit airlines from including provisions within their frequent flyer programs’ and airline co-branded credit cards’ terms of service that reserve their right to make changes at any time without notice to consumers, and instead require them to provide at least one year’s notice to consumers of any changes to these terms of service, or any actions that would devalue or jeopardize accrued points.
- Require airlines, within 90 days of enactment, to prominently display on every page of their website a disclosure of the financial value of one point/mile, updated in real time, so that consumers may more easily compare the value of points across different airlines.
- Require airlines, within one year of enactment, to display airfare and add-on pricing concurrently in dollar value and points/miles value, without consumers needing to alternate between the two, so consumers can easily compare the worth of their points. Further, it would allow consumers to pay for airfare and add-on services in any combination of points or dollars.
- Ban junk fees related to points/miles by ensuring that consumers are allowed to transfer points to family members or other participants in the same program, and prohibit airlines from charging fees to do so.
- Prohibit airlines from limiting the number of points/miles that can be transferred to another traveler’s account and ensure that any points/miles remain of equal value once transferred.
- Prohibit accrued points/miles from expiring.
Text of the bill is available here.
