Aw Nerds! This page is out of date. Please see our American Airlines AAdvantage program review for up-to-date information.
I got an email from American Airlines a couple of weeks back begging me to buy some extra frequent flyer miles for my AAdvantage account, and they’re offering bonus miles on top of whatever I buy until February 28, 2011. The cute graphic even has a picture of a loving couple holding hands on the beach, and a tagline meant to inspire dreams of jet setting. The only problem is, it’s not a good deal.
As a general rule, if an airline is trying to sell you frequent flyer miles, it is probably a bad idea to buy them. They give away miles like they’re candy with travel miles credit cards and other bonuses that travel hackers and rewards junkies like to exploit to no end. And when it’s time to make up for all those free miles they’re giving away? They try to convince the rest of us to pay too much for more miles, so they can recoup some of the cost.
To make sure I wasn’t just being cynical, I pulled up AA’s site and checked how much they charge for miles, and even after the temporary bonuses, the prices of the miles are crazy. Here’s the breakdown:
|Miles to buy||Bonus miles||Dollar cost||Cost per mile|
So they’re effectively charging two cents for every mile. A traveler with a grand to spend can manage a low-low 1.8 cents per mile. Now let’s put this in perspective.
When it comes time for you to redeem your reward for travel, you will need at least 25,000 miles to earn a roundtrip domestic ticket, or at least 50,000 miles to earn a roundtrip international ticket. I say “at least” because these types of tickets are notoriously difficult to find, so you generally end up having to use more, but I’ll give AA the benefit of the doubt for now.
In order to buy 25,000 miles with these bonuses, you’ll have to pay $525 (the cost of 21,000 miles, plus the 4,000 mile bonus). Any domestic ticket in the 25,000 mile bracket would cost much less than that, so you’re better off just paying cash. Similarly, to reach 50,000 miles you’ll have to pay $1,000 (40,000 + 15,000 bonus). Again, you’re probably better off paying cash for the flight.
As a rule of thumb, airline miles are rarely worth more than one cent (unless you’re a much savvier travel hacker than I am). And we did some extensive research a while back and created an infographic depicting the values of frequent flyer miles across a number of airlines, based on average ticket prices, only to find that American Airlines only averages about 0.76 cents per mile. So paying two cents for a mile is effectively throwing money away.
How to get those miles at a better rate
With the Citi® / AAdvantage® Platinum Select® MasterCard®, you can earn a signup bonus: Earn 30,000 American Airlines AAdvantage® bonus miles after making $1,000 in purchases within the first 3 months of account opening*. The card’s annual fee is $95, waived for first 12 months*, but if you’re loyal to American Airlines, you’re likely to come out ahead.