Thursday, September 20, 2012

Buying Miles from the Airlines - Ever a Good Buy?

Is it smart to buy miles directly from the airlines? This is a question that several people around the office have recently asked me.  I get travel questions like this from time to time -- probably because the office knows I'm a big travel nerd.

A few times a year, each and  every airline offers a 25%-100% bonus on purchased miles.  You buy 25K or 50K miles and get a huge bonus. Currently, US Airways is offering a 100% bonus on purchased miles -- for $1,750 you can buy 50K points and get a bonus of 50K points for a total of 100K.  Including the taxes and fees the cost is $1,881.25 -- or $0.018/mile.  This isn't a great deal, but better than what it is usually.

Do I suggest you buy these miles now and keep them in your mileage bank? No, I wouldn't recommend that. Buying miles on speculation - that is, without a specific award redemption in mind - isn't a great idea.  The airlines can and have readjusted their award charts -- if you buy on speculation you could be stuck with 100K miles and come to find out these miles only get you a coach ticket to Europe in a few months. Definitely not a good use of money.

On the other hand, if you have a specific award ticket in mind and need to buy all the miles or just top off your account, this could be a great promotion.  Like I always say, don't hoard your points/miles. Use them.  They aren't worth anything, no matter how many you have unless you actually use them. Use your miles and plan a trip like this, this, this, or this.

My advice, look at your own travel style and any upcoming trips you want to plan. Does it make sense to pay nearly $2K for 100K miles?  That just about $0.02/miles, is that a good price for what you are looking to do?

Have you purchased miles like this before?  What would make you buy these miles?  Do you buy on your regular airline or do you buy on other airlines, looking to try a new services?

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