There are several buy miles promotions from various airlines going on at the moment – including a United 40% bonus that ends today! – so we asked TPG contributor Nick Ewen to run through the options and crunch the numbers to see if any of them might be worth taking advantage of.
As miles and points enthusiasts, we all know the myriad ways to earn (and then burn) various hotel and airline currencies we accumulate over time. It’s also well-documented that buying miles outright or transferring them to friends/family is generally not the best way to do so, often requiring 3+ cents for each mile purchased/transferred. As a result, airlines sometimes offer bonuses to incentivize frequent flyers to top off account balances, and the first part of 2013 has been a banner year for these promotions. This post will highlight the current offers out there and share some scenarios in which they may (or may not) be worth it.
United is currently offering a bonus of up to 40% on purchased miles.
(Targeted) United MileagePlus Up to 40% Bonus on Purchased Miles – Ends Today!
Purchased miles usually cost 3.7625 cents each, so you are getting a noticeable discount even on the low end of the spectrum, and you can get miles for as low as 2.26 cents each. However, as you get up towards the higher end of each interval, it may make sense (and actually be cheaper) to bump up to the next one. Why pay $421.40 for 14,000 miles when you can get an extra 1,000 miles for less cash?
This can be a handy way to top off an account, but whether to purchase the miles for a specific redemption is entirely up to you.
For example, let’s say you are looking for tickets to Europe this spring or summer. Given the high season and relatively short booking window, coach and business class fares are quite high. Through this promo, 60,000 MileagePlus miles (enough for a round-trip coach ticket from the U.S.) would set you back $1354.50, while purchasing 100,000 MileagePlus miles (round-trip business class) comes in at $2257.50. While it’s likely that just buying an economy ticket would be cheaper, you’d be hard-pressed to find a business class ticket would be less than that cost. As always, just be sure to check award availability before making the purchase.
American is also offering a bonus of up to 50% on purchased miles this month.
Since the bonus is a set amount within each interval, it should almost always makes sense to purchase the lowest number in the interval, and both the percentages and cost per mile figures above assume that. In other words, the low number in each interval will maximize the percentage bonus while minimizing the cost per mile. For example, purchasing 10,000 miles will actually give you 13,000 (10,000 regular miles + 3,000 bonus miles), a 30% bonus at a cost of 2.4 cents per mile. Purchasing 14,000 miles will give you 17,000 (14,000 + the same 3,000 bonus miles), only a 21.5% bonus and 2.5 cents per mile. Not a huge difference, but make sure you crunch the numbers to see if your particular purchase amount makes sense.
As always, this can be an okay way to top-off your account if you are close to a specific award, it may make sense to pull the trigger. However, if you are really low on miles, there may be specific situations where it makes sense to simply purchase the full miles needed for an award. This is especially true for long-haul premium travel (other than flying to London and getting slammed with horrendous fees and surcharges).
For example, a one-way first class ticket to Asia on Cathay Pacific will set you back 67,500 AAdvantage miles. Through this promo, you could purchase 48,000 miles for $1355 (just under 2 cents/mile), and the 20,000 bonus miles will give you enough for the ticket. First class to Hong Kong, Singapore, or Bali for only $1355? Sounds like a pretty good deal to me – just make sure that award seats are available and that your particular redemption is a good value proposition.
A great, cheap alternative way to rack up miles fast would be to get in on some of the current AAdvantage credit card offers out there. Citi has some competitive offers out there for its range of co-branded AAdvantage cards with 50,000-mile offers on Citi Platinum Select AAdvantage Visa Signature, the Citi Select AAdvantage American Express and the CitiBusiness AAdvantage Platinum World Mastercard for spending $3,000 in four months.
Also through February 28, 2013, US Airways is offering a bonus for buying miles, but this one is much more straightforward than the aforementioned options with AA and United. No matter the number of miles purchased, members will receive a 50% bonus.
US Airways is also currently holding a 50% buy miles bonus through the end of February.
While not nearly as lucrative as the 100% promos in the past, this can again be a nice way to top off an account, especially if the fact that there was no 2012 Grand Slam left you just short of a reward (as it did for me!).
Purchasing miles from US Airways normally costs 3.7625 cents per mile (including the 7.5% tax recovery charge), so through this promo, the price drops to just over 2.5 cents per mile. The maximum number of miles you can purchase in a single transaction if 50,000, but you are allowed two such purchases to obtain the maximum 50,000 bonus miles offered in the promo.
1) Your account must be open for 12 days in order to purchase, share, or gift miles. In this case that would mean no later than February 16.
2) You can build up your mileage much cheaper by getting the US Airways World MasterCard, which currently offers 35,000 miles after the first purchase and 10,000 miles on each account anniversary plus one year with the $89 annual fee waived (though there are several offers out there – see this post). Opening the card and maxing out this promo would net you 190,000 Dividend Miles for $3,762.50. Not exactly chump change, but definitely a good haul.
3) There are still ways to actually buy miles much cheaper including using the US Airways Mileage Multiplier, which TPG wrote about here, and with which he was able to buy miles for as low as 1.2 cents each.
4) Be sure to consider the AA-US merger when thinking about these purchases. As of now, the AAdvantage and Dividend Miles programs are remaining separate, but with mid- to late-2013 as the target date for merger approval, it’s likely that your accounts will eventually be combined. If that does in fact occur, it makes more sense to purchase AAdvantage miles for less than 2 cents/mile rather than Dividend Miles at slightly over 2.5 cents/mile.
British Airways is running a bonus of up to 25% on purchased British Airways Avios from now until March 28, 2013. The more Avios you buy, the higher the bonus you get, unfortunately it still doesn’t make this a good deal.
Prices for Avios range from 5.3 cents apiece if you purchase just 1,000 of them ($53 total) to 2.85 cents apiece if you purchase the annual maximum of 24,000 ($685 total). In terms of this promotion, Avios range from 5.3 cents apiece to 2.28 cents apiece, so you are getting a discount on the higher end.
Avios can only be purchased online and in multiples of 1,000. Purchased Avios are non-refundable, so no changing your mind later. They usually appear in your account immediately, but can take up to five working days.
One instance where this might be worth it is if you were flying premium economy on British Airways from the East Coast to London and you wanted to upgrade using Avios. Upgrading one cabin class each way takes half the amount of base Avios points you need for an economy redemption on that route, so from New York to London that number would be 10,000 Avios each way. For roundtrip, you’d need a total of 20,000 Avios to upgrade from premium economy to business class.
With this promo, you could purchase 18,000 Avios for $520 and get a 25% bonus of 2,700 Avios for a total of 20,700 Avios, putting you just over the edge for the upgrade points necessary (at a price of about 2.5 cents per Avios).
British Airways is currently having a fare sale on business class tickets to Europe that lasts through the first week in April, but after that, a premium economy ticket in April would cost you around $1,800.
The same ticket in business class would cost you nearly $4,600!
Using Avios to upgrade on this itinerary could save you nearly $3,000.
So by buying the Avios to upgrade, you’d be using 20,000 Avios to save around $2,280 – that’s just over 10 cents per Avios in value, and about four times the value you paid for them.
That said, this is still a very expensive option and I’d only recommend it if you were planning to pay for premium economy anyway and upgrading to business class was worth the few hundred extra dollars.
Otherwise, I think it’s better in a pinch to buy Amex points at 2.5 cents each and transfer them to Avios when there’s a transfer bonus, or to get the British Airways Visa Signature Card (the current offer of up to 100,000 Avios when you spend $20,000 within your first year ends February 27), and earn your points with your everyday purchases since you get 2.5 Avios per $1 you spend on British Airways, and 1.25 Avios per $1 on other purchases anyway.
Last but certainly not least, for anyone who got in on Avianca’s 100% mileage purchase bonus back in December, they are now offering a 100% transfer bonus through February 20, 2013. This can be a lucrative backdoor opportunity for accruing additional miles and then booking Star Alliance awards.
With this bonus, transferring miles costs 0.75 cents each.
Since TPG’s in-depth review of the program back at the time of the purchase miles promo, it appears that their award chart hasn’t changed significantly, though one of the redemptions TPG covers (US – South Africa) is now 125,000 miles round-trip, 5,000 miles more than it was at the time. There’s no denying one thing about the chart; it is definitely one of the more complicated ones I’ve seen!
Under normal circumstances, you can transfer LifeMiles to friends and family in increments of 1,000 miles for $15 (or 1.5 cents/mile), so through this promo, that price is cut in half to 0.75 cents/mile. If you maxed out the promo back in December and purchased 75,000 miles (meaning your current balance is 150,000 miles), you now have the opportunity to transfer some of those miles to a friend or family member. To me, the best way to do this would be for a round-trip business class flight from North America to Southern South America. This would typically be 100,000 miles per ticket, but if you transferred 50,000 of those miles you purchased back in February (at a cost of $750), it would turn into 100,000 miles in your friend/family member’s account. With your resulting 100,000 miles, you could book two round-trip business class tickets to Buenos Aires, Santiago, or any other Star Alliance destination in the southern part of South America. Your total cost would be $2250 + $750 = $3000. Not a terrible deal for two round-trip business class tickets.
As always, be sure to check for award availability here before initiating any of these transactions, as they are all nonrefundable if the space isn’t what you hoped it would be.
My advice? Don’t take advantage of any of the promos just to build up your mileage balances without a specific redemption in mind. The uncertainty surrounding the AA-US Airways merger definitely pushes me away from investing a good chunk of cash in purchased miles in either program, and given the extensive coverage of Avianca’s program in the blogosphere, I’d say it too is itching for a devaluation.
As with all buy miles bonuses, before you make a decision, go through the math and make sure buying them makes sense for you and what you want to redeem for, because many of these are not great deals and with a little creative thinking, you can find ways to rack up those miles cheaper.
Does anyone plan to take advantage of one or more of these promos? Please add your thoughts in the comments section below!