If Spirit Airlines closes, will your card refund your ticket?

Although a potential bailout of the US government Still being discussed, the end of the runway for ultra-low-cost carrier Spirit Airlines may be in sight.

If the airline were to cease operations, Spirit would be the largest U.S. airline to do so in quite some time, and understandably, there are already a lot of questions among travelers who have tickets to fly on an airline with an uncertain future.

While there won’t be definitive answers for all situations at this time, here are some things you should know if have tickets to fly with Spirit Airlines and they expect some type of protection or refund for that purchase.

Will Spirit Airlines refund your tickets if it ceases operations?

When an airline ceases operations, the likelihood of individual travelers getting a refund from that now-defunct airline is very low. And obviously the airline can’t even issue you a credit in that case since it’s no longer operating.

So if you have a Spirit Airlines ticket and the airline ceases operations, it is highly unlikely that they will be able to provide you with anything in exchange for the ticket you purchased.

Will your credit card refund you if Spirit Airlines stops flying?

Your credit card may seem like the alternative here, but the protections you probably have don’t work as you might expect in this scenario.

Why typical credit card travel protections don’t apply

At TPG we talk a lot about Built-in travel protections when you use certain credit cards to purchase your airfare and how your credit card’s built-in benefits will sometimes reimburse you for expenses that airlines will not reimburse in the event of long delays and even cancellations.

Unfortunately, that type of travel protection is unlikely to help if Spirit ceases operations, as these benefits generally exclude situations where an airline stops flying entirely.

But fortunately, that doesn’t mean your credit card can’t help at all.

When a chargeback could help you get your money back

If Spirit were to close and cancel your flight without issuing a refund, your credit card may still offer you a path to get your money back.

This is because most credit cards offer consumer purchase protections based on the Fair Credit Billing Act that allow you to dispute charges for goods or services that were never delivered, which would potentially apply if an airline ceases operations and is unable to provide you with your scheduled flight.

To take advantage of these protections, you typically must act quickly, often within 60 days of the statement on which the charge appears.

While your credit card may help with charges made outside of that time frame, that’s not guaranteed. Once you file a dispute with your credit card company, the credit card issuer must acknowledge your claim and investigate it.

During that time, you generally will not be required to pay the disputed amount and may not adversely affect impact your credit score while the investigation is ongoing.

“This is probably your best recourse… but there is no guarantee that a refund will be made,” Henry Harteveldt, president and travel industry analyst at Atmosphere Research Group, warned TPG in a previous interview.

How to file a dispute (and what you’ll need)

The Department of Transportation shares that in the event of a chargeback claim in scenarios like this, you should be prepared to provide your credit card company:

• Your account number
• Copy of the plane ticket, itinerary or receipt.
• If the transport was partially used, identify the used and unused segments.
• Indicate that your airline is bankrupt and has ceased all operations, you did not receive the service charged to your card, and you are applying for credit under the Fair Credit Billing Act.

This means you’ll want to take a screenshot of your ticket information and any flight cancellation information as it is posted. And since there’s no guarantee how long a closed airline will keep individual flight information available on its website, we recommend doing it all in a short time.

You can often start this process on your credit card account next to the individual charges by clicking “dispute this charge” or “problem with this purchase.”

You will then be prompted with a series of options and questions to begin the process.

Ultimately, the credit card issuer decides whether your claim qualifies, and results may vary.

It’s also worth noting that these protections are stronger when pay by credit card. Debit card protections may differ by issuer and may not offer the same dispute rights if the airline does not deliver your flight.

Filing a claim through bankruptcy proceedings is another option, but it is generally a long shot. Passengers are generally considered unsecured creditors and can recover only a small fraction of what they are owed, if anything.

Will your credit card cover new flights if Spirit cancels yours?

In most cases, no: your credit card is unlikely to cover the cost of booking a new flight if an airline goes out of business.

While some premium credit cards offer trip interruption or cancellation coverageThose benefits typically exclude situations in which an airline ceases operations entirely.

That means if Spirit were to close and you still need to travel, you’d probably need to book a new ticket out of pocket, and last-minute fares could be more expensive than the ones you originally purchased. That said, some airlines, such as American Airlines, have already announced that they have capped main cabin fares on routes shared by American Airlines and Spirit.

Other airlines, such as United and Frontier, have shared that they are preparing to support Spirit Airlines customers and crew if the airline ceased operations. This help can take the form of “rescue fares” or discounted tickets for stranded passengers and those with upcoming travel booked on Spirit.

Of course, have your own plan B in the form of emergency reservation of points and miles He is also wise.

In a nutshell

If Spirit Airlines were to stop operating, the credit card you used could help you recover the cost of your ticket, but only if you act quickly and follow the dispute process (also known as a chargeback).

Even then, a refund is not 100% guaranteed and you should be prepared to provide documentation and make alternative travel plans on your own. Using a credit card for ticket purchases, having proactive backup plans, and acting quickly can make a significant difference in how much you’ll ultimately recover in situations like this.