In Defense of Buying Miles at 2 Cents Each

A simple google search of “what are my miles worth?” will provide you over 319,000,000 results. You’ll see posts telling you that miles are worth 1.3 cents each, or JetBlue is worth more than Alaska. You’ll even see people tell you that flexible currencies are valued at exactly 1.8 cents where last year they were worth 1.7 cents each. 

While I can understand the visceral need to assign an imaginary value to an imaginary thing such as credit card miles and points, it’s a near impossible task. Airlines change the award charts on a moment’s notice. Hell, sometimes they just straight up REMOVE the award charts completely. Some airlines charge more depending on when you want to fly. For these and many other reasons, it’s hard to know what your miles are really worth.

Many people swear by buying miles at NO LESS than 1 cent a piece. Some are ok with a higher cost of 1.72 cents each. But paying 2 cents a mile? Oh the HORROR! How could you possibly think that buying miles at 2 cents a piece is anything more than a waste of time and money, a fool’s errand.

I’m here to defend my position that buying miles at 2 cents each indeed can be a good deal. Not that it will always be a good deal, but just like all things in life, if the opportunity is right for you, then it’s a win.

Yesterday’s Post

Barclays Card came out with their FlightCents promotion again yesterday. This promo was launched as a pilot throughout last year and it’s back this year in a slightly tweaked format. Here’s the read, but the long story short version is your purchases round up to the nearest dollar, you pay the difference, and you buy those miles at 2 cents a piece.

Set your threshhold

From the comments, you would have thought that I committed such a travesty, such an affront to the mileage community, that all my mileage accounts should be closed and I should be banned from reentry to any club, gathering, or event in the history of frequent flier meetups. We approved some of the nicer comments. Some of them didn’t pass the civility test and were promptly deleted.

In the title, I comment that it’s an amazing mileage earning opportunity. I stand by my comment. The ability to buy miles at 2 cents a piece whenever you want to at such small amounts is an amazing opportunity.

The (Current) Cost to Buy Miles

If you want 2,000 miles right now to top off an award, you’re going to pay a little bit over $100. That’s a cost of 5 cents a mile. Yes, 5 cents a mile.

In order to get your BEST deal, you’ve got to buy TENS of thousands of miles. Check out the 150,000 mile option to earn a 40% discount.

Congrats! You’ve SAVED $1784! Hahaha. Sure, and guess how much the miles are? 1.91 cents each. A whopping 9/10 of 1 cent savings over the promotion that I spoke about yesterday.

I get it… there are sales

Yes, there are tons of options to buy miles at a discount. As mentioned before, there was a sale a while back at 1.72 cents each if you bought a ton of miles. 

It should be noted that not everyone:

  1. Wants 150,000 miles
  2. Needs 150,000 miles
  3. Can pay ~$3,000 today for miles

In this scenario, this sale doesn’t do jack for any of those families that might need some miles to top off their balances. Rounding up your purchases, and getting creative about what you buy and where you buy it, does.

The price below is the price WITHOUT a sale. That’s at about 3.1 cents a mile.

Cost to buy 150,000 American Airlines Miles

So, What’s Wrong with 2 cents a Mile?

Nothing.

Check out some of the comments from posters yesterday.

So, let’s look at some amazing values where 2 cents a mile makes PERFECT sense:

  • USA to South Pacific, First Class, 110k miles one way. $2,200 one way in first class
  • USA to Europe, Business Class, 57,500 one way. $1,150 one way in business class
  • USA to USA, Main Cabin, 12,500 one way, $250 one way in coach (great for high cost, last minute trips)
  • Europe to Middle East, First Class, 62,500 one way, $1,250 one way in First Class
  • Europe to South Pacific, First Class, 115,000 one way, $2,300 one way in First Class

Etihad Apartment Ben Stretching

These are just a FEW options that provide excellent value that you can, for all intents and purposes, put on a lay-a-way plan buying miles through your Barclays Card.

Does it Always Make Sense?

Absolutely not.

In most cases, its a bad idea to buy miles just to buy miles. Airlines devalue and change their awards without any notice and there’s nothing you can do about it. If you’ve got a plan in place and you know you want to go somewhere, then it makes perfect sense. But that’s the same for all things in the points and miles world.

Here’s what I think you should do. And what I’m about to say is going to be pretty controversial in the miles and points community. Ignore the mileage valuations. Redeem miles at a value that makes sense for YOU. I use 2 cents a piece across every program as a simple baseline for me to decide if I want to redeem miles or not simply because I know that I can always generate miles at that price.

If you’re short on cash and high on points and you don’t want to pay for a flight, guess what… you SHOULD redeem the miles. Just because you CAN buy miles at 1.7, 1.8, or 1.9 cents a mile later doesn’t mean that you should.

I welcome all civil discussion and debate below. Let the comments begin!

Author: Jon Nickel-D'Andrea

Share This Post On

9 Comments

  1. Every time you forgo using a cash back credit card in favor of one earning points or miles, one is actually “buying miles” by forgoing cash back.

    Post a Reply
    • Im not at all interested in cash back since that card won’t buy me a first class ticket overseas.

      Post a Reply
      • Let me rephrase since I don’t think you got the gist of my post: When one pays for an unbonused item costing a dollar, he or she gets a point, mile, or whatever. Since that purchase could have been made with a cash back card, cash back was forgone, and a point was received. In essence, the point or mile was purchased for the amount of cash back forgone. Points and miles earned via CC spend are paid for with a real opportunity cost of giving up cash back whether or not you are “interested” or not. So people are essentially buying points for 1.5-3 cents each every time they use a points “earning” credit card. Btw, I’m not a cash back guy, just someone who recognizes that we are all paying for points, some ways are just more obvious than others.

        Post a Reply
      • Not a cash back guy either, just saying that by forgoing cash back, we are all buying points in a sense.

        Post a Reply
      • Actually cash will buy you a business class ticket overseas – $700 from Dublin to USA on TAP air portugal. And you see similar deals for $1000 one-way from Europe every year during December. So 2% cash back on $50k spend buys a ticket, better than 50k points that won’t buy a saver award ticket (if you can find one).
        Miles that you earn from flying cost you nothing. But miles you purchase (as NoMas recommends) or that you earn thru credit card spend do have a price.

        Post a Reply
        • You will see similar deals, but for those fancy first class flights you’ll be hard pressed to find those deals.

          Post a Reply
  2. You are right. Sometimes people just like hearing that. So there it is. You are right.

    Post a Reply
  3. Not sure I agree with buying miles (except for an urgent top up) but I concur with the .02 valuation as most of my miles are earned through flying. However I would expect a higher ROI on my Chase UR points which I plan to use for business class awards.

    Post a Reply
    • Agreed – the UR points are such an amazing value if you use them right – so many people don’t know how to do it the right way.

      Post a Reply

Trackbacks/Pingbacks

  1. 7 nights driving for Uber, the latest way to be #Bonvoyed, award search resource, and more - […] In Defense of Buying Miles at 2 Cents Each […]

Leave a Reply

BoardingArea

Join the List

Receive the latest news daily.

You have Successfully Subscribed!