Should you earn miles or buy miles? #travel #mileagerun

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We constantly come across buy miles promotions from American Airlines, United & Delta and possibly others as well. Promotional miles rate wander close to 2cpm. If you buy without any promotions you would be paying more than 3cpm. Lets dissect a couple of scenarios to see if it makes sense to buy miles during these promotional offerings or do mileage runs and earn miles in the traditional means.

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Current American Airlines buy miles promotion can be accessed here.

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Typical miles needed for award redemption’s: (depends on where in the world you are travelling from the US)

Economy awards range from 25K – 90K

Business awards range from 50K – 140K .

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Scenario 1: Travel within US for a family of two from West Coast to East Coast

Economy awards : 25K miles/person

Business awards : 50K miles/person

Buy Miles:

Economy tickets would cost you about $1000 & Business would cost you about $2000. We know that we could get much cheaper fare for economy than the $1000 that would spend before taxes for the needed miles. Definitely not worth buying miles for the Economy redemption. Business class fares are typically in the range of $800-$1100, so at $2000 you are essentially paying the ticket price. The only way you would come on top for the business class fare would be if in case you used travel rewards card that provide 2x or 3x miles per dollar spent.

Earn Miles:

Average miles from West Coast to East Coast is about 5K miles. So essentially you would need about 10 trips in economy or 5 trips in Business class to get the needed miles for economy award travel. In either case you would have to spend for for these trips to earn the miles if you are not a business traveler. You could follow flyertalk forums to hop on a mileage runs to make this happen in a smaller budget.  The other means is to signup for credit cards with large bonuses to accrue the needed the miles for redemption. Easier route especially if you both family members could sign up for the credit card. Top travel credit cards currently offer 40K-60K in sign up bonuses.

Whether you buy or earn miles, finding award availability would be another challenge but as along as your plans could be flexible there is always options to make use of the miles earned/bought.

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Scenario 2: Travel to Europe for a family of two from US

Economy awards: 50K miles/person

Business awards: 100K miles/person

Buy Miles:

Economy tickets would cost you about $2000 & Business class would cost you about $4000. Cost to buy miles for economy redemption doesn’t add any value to your wallet. You will probably be able to find better deals than $2000 expense. Business class promotional fares range between $1800-$2200 but typical fares range close to $3000 or above. $4000 price point to buy miles for a business class redemption may be a good option if you know you would be flying business class anyway. American Airlines also has a 10% back for its AAdvantage member who redeem their miles for travel. If you could leverage 2x/3x miles credit cards for this purchase that would be a added bonus.

Earn Miles:

I’m going to assume average of 10K miles from US to Europe just for ease of the math. It could be more from West Coast & less from East Coast. One needs about 10 trips in economy & 5 trips in business class to earn the miles needed for economy award. Again Flyertalk forums are handy to find mileage runs that you can leverage to earn the needed miles in a tighter budget.  Assuming average economy fares $750, 10 trips would cost you about $7500 to achieve the 100K miles for economy redemption for two people. $7500 expense on a credit card could gain anywhere from 7500 – 22500 miles. From the 1o trips you made, you probably achieved Elite status with the airline as well. With American Airlines, once you achieve Platinum status there is a 100% bonus on the miles. So in essence you might be able to reduce the number of trips to achieve 100K miles & in turn reduce the cost of travel as well.

American elite status scenario:

First 3 trips of 10K would result in 30K miles & you would achieve Gold Status

4 & 5 trip of 10K would result in 25K miles because Gold Status provides 25% bonus miles. You would achieve Platinum Status.

6, 7 & 8 trip of 10K would result in 60K miles because Platinum status provides 100% bonus miles. You would achieve Executive Platinum Status.

cost would be $6000 instead of $7500 predicted earlier when it comes to travelling on American. Again if you have the time & patience you might be able to plan mileage runs more efficiently.

Again is it possible to do 8 trips of 10K miles in a year? – May be for frequent business travelers but for non-frequent travelers like us it might take more trips in a year to achieve the needed miles

Another important here with American moving towards revenue based miles program later this year, earning miles traveling in economy is going to be a big challenge. Once the revenue based system kicks in it may make sense to buying miles during promotions to top up your account & redeem for exotic vacation.

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Seems like Buying miles is a easier route. What are we missing here?

Well the first catch is that there is limit on how many miles you could buy in a calendar year. United is 60K & American is about 150K.

One doesn’t earn Elite status when you buy miles. You won’t be able to benefit from various perks of the Elite Status.

One doesn’t earn miles for award ticket.

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Final Thought:

Both buying & traditional butt-in miles earning involve quite bit of investment. For frequent flyers traditional miles earning is easily achieved with their profession but for those of us who are not business travelers the minimal investment approach is Credit Card sign up bonuses & build up on it with regular monthly expenses to accrue on the miles for a great exciting redemption in the future. The most important factor with the credit card approach is not to overspend & pay off in full otherwise paying interest on the credit cards can nullify the miles earned using them. Also have a plan on when you want to redeem the awards because constant program devaluations or updates can cause a disappointment if you cannot realize the needed award redemption. 

My personal choice of miles/rewards program American Airlines, BA Avios , Chase Sapphire & American Express Rewards

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Feature Photo by SEOPlanter