Our air travel mantra since the start of the war in Iran has been: Buy your tickets now—even if you’re not traveling for many, many months—because airfares are going to continue rising.
And we were right. Airfares to and from most gateways are currently 22.4% higher than a year ago, according to the Consumer Price Index from the Bureau of Labor Statistics. The climbing costs of jet fuel and other factors have pushed prices for plane tickets up, month by month, since the start of the war on Feb. 28.
But even if we had been wrong in our prediction about the direction airfare was headed (up), the advice to book flights as soon as possible would still have been solid because it carried little-to-no risk.
Unless you are foolish enough to buy a “Basic” fare, which allows no changes or cancellations, every other airline fare class allows you to cancel your ticket and get a credit. So if prices drop, you can cancel your overpriced ticket, use the credit accrued, and book a lower-priced flight.
Alas, you don’t get the price difference back in cash, but you would get the difference back as a travel credit for future flights.
So, for instance, if you book a flight for $500 but later find a cheaper one for $300, you can cancel the original ticket, book the cheaper one, and get a $200 credit from the airline for future use.
There's only one small problem: human nature.
Every year, travelers forget about their airline accounts and hundreds of thousands of flight credits expire without being used.
It’s hard to know how many exactly. The airlines aren’t required to report the number of expired flight credits annually, though consumer travel expert Christopher Elliot’s reporting has shown that as much as 90% of travelers don’t redeem flight credits in time.
A system rife with confusion
Part of the reason why so many people squander their credits is that there’s no consistency to the rules from airline to airline.
With most U.S.-based carriers, the credits expire in 12 months, though Delta has some credits that are good for 5 years, and Southwest has some that expire after 6 months—to point out just two such outliers. And there are others, especially when you loop in airlines from outside the United States.
Plus, some credits are calculated by the “book by” date—i.e., when the credit was issued—while others are from when you purchased the ticket, and still others are tied to a “fly by” date, meaning you have to jet back by the expiration date.
To add even more complexity, some airline credits can only be used by the person whose name was on the original ticket, but others can be transferred. I considered making a chart of all the rules, but since those change regularly that seemed like a wasted effort.
The best strategy is to make note of the regulations when you acquire a credit. Even if the rules change later on, the terms and conditions from when your credit was issued should carry over when it comes time for you to actually use that credit.
What to do if your credits are about to expire?
Three words: Buy a ticket.
That might seem like a nonsensical strategy if you don’t have travel planned in the future, but making an airline reservation does something important: It starts the countdown clock ticking again on the credit you own.
The destination of the flight you book may be less important than what it costs. That's because if you buy a less expensive ticket than the value of the credit, part of the value may disappear, never to be seen again.
If you buy a more expensive ticket, you’ll have to add in cash to make up the difference.
Try to be like Goldilocks instead: Get a ticket whose price is just right.
Some carriers do a “ticket-for-ticket” exchange, meaning you turn in the old ticket to get a new one and price doesn’t factor in—though if your new ticket would normally be cheaper you don’t get any money back. These types of arrangements usually come into play when the airline issues you a ticket credit because of some kind of problem with your original flight, not when you’ve canceled to get a better price.
Also in the “problem credit” realm: In some cases your credit will only apply when you use it toward a flight going to and from the same airports on your original itinerary. Again, this scenario is more likely if your flight credit came from a flight canceled by the airline, not you.
Final warning: Flight credits aren’t mad money, usable on anything the airline in question sells or the fees it may pile on. Most airlines won’t let you use your credits, for example, to pay for checked luggage, bring a pet with you, select a seat, or get an upgrade.
Obviously, that would be way too much logic and generosity to expect from an airline.