Buying Miles for Travel. Does it Make Sense?

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Back in the day, earning airline miles was a pretty straightforward process — one mile flown equaled one mile earned. Nowadays, the airlines are trying to find ways to capitalize on their frequent flyer programs. Case in point: selling miles.

So should you pay cash to buy airline miles or just earn them? In this article, we're going to give you the inside scoop.

If you play the frequent flyer game, you know that points are like gold. But should you be laying out hard-cold cash in reverse to buy them? Surprise! There are a few scenarios where it actually makes sense to purchase miles. First, a few things to know:

  1. Buying miles is typically not cheap — most airlines will charge somewhere between $20 to $30 for 1,000 miles.
  2. You need to buy in bulk. Most airlines only sell miles in increments of 1,000.
  3. It's usually not a great value. In most cases, buying miles doesn't make sense, since the miles are usually worth less than the price you pay to acquire them. But there are exceptions.

READ MORE: "The Best Travel Points Credit Card: American Express Platinum or Chase Sapphire Reserve?"

There are reasons to buy miles. (Photo by William Iven on Unsplash)

Buying Miles to Top Up Your Account

We’ve all been there — on the phone with the airline and ready to snag those hard-to-get business class award seats, only to be told that you’re a few miles short. In those instances, it might make sense to pay the extra premium to purchase the miles directly rather than waiting for the miles to transfer from your credit card, and risk having someone else book those seats. But since most airlines sell miles in increments of 1,000 (as mentioned above), that means that you’ll have to pay for the full 1,000 miles, even if you’re only a few hundred miles short.

We've got a few hacks that will help:

  • It Pays to Borrow: Some airlines allow their members to transfer miles between accounts, usually for a small fee that is less than the cost of purchasing the miles outright. You can expect to pay just $5 to $15 for each 1,000-mile increment.
  • Ask if You Can Buy Fewer Miles: Some airlines will allow you to transfer the exact amount of miles needed, so that those precious miles don’t go to waste.
  • Look for Orphans: In the event that a friend or family member is sitting on "orphan miles" (in other words, a small number of miles that they don't plan to use), it may make sense to pay a higher fee or buy 1,000-mile increments and have them transferred to your account.
  • The Takeaway: If the fee is low enough ($10 or less) and you’re able to redeem the miles at a higher valuation, we think it makes sense to buy the miles.

READ MORE: "Upgrades – What You Need to Know"

Don't let those hard-earned miles expire. (Photo by Krzysztof Kowalik on Unsplash)

Buying Miles to Keep Your Existing Miles From Expiring

Many frequent flyer programs these days don’t have expiration dates for miles — as long as there is activity on your account within a certain timeframe, typically between 18 and 36 months, depending on the program. If your account remains inactive beyond this timeframe, the entire mileage balance will be forfeited. Here's what you need to know:

  • Find out the Definition of a Qualifying Activity: This differs between programs — some require you to take a flight within a certain time period, while others only require you to earn a mile, regardless of whether you fly or not.
  • Buy Don't Fly: If mileage purchases are considered a qualifying activity and will enable you to prevent your miles from expiring, go ahead and purchase more miles.

READ MORE: "Top Tier Elite Status: Which US Airline is Best"

Think about this: You might save $6,000 on a first-class plane ticket to Japan by buying miles. (Photo by David Edelstein on Unsplash)

Buying Miles for Aspirational Travel

As touched upon earlier, buying miles doesn’t typically represent good value, as the cost to acquire the miles is generally higher than the value at which they are redeemed. There are, however, some exceptions to this rule that mainly revolve around aspirational redemptions like long-haul flights in business and first class. Check out these scenarios:

The Full-Fare Scenario

  • Consider this: The typical business class fare to Europe or Asia will set you back somewhere between $4,000 to $10,000. An award ticket in business class will set you back somewhere between 100k and 150k miles, depending on the program.
  • Do the Math: You might be surprised to find out that purchasing the miles represents a small discount compared to buying the ticket for cash outright.
  • The Downside: Award space is limited and you might not have as many dates to chose between.

The Miles-on-Sale Scenario

What makes buying miles even more attractive is when an airline is selling miles at a discount.

  • How it Works: The discounts usually come in the form of a bonus. In other words, if you purchase 1,000 miles you’ll get an additional 40%, 60%, or sometimes even 100% bonus.
  • The Best Airlines: Programs such as Air Canada’s Aeroplan, United MileagePlus and Alaska Airlines Mileage Plan are known to sell miles at a discount on a regular basis.
  • The Best of the Best: Avianca’s LifeMiles program is probably the best of the bunch and has made a business out of selling miles at a discount; during promotions it’s been possible to get as much as a 150% bonus.

The Big-Money-Saving Scenario

Bonus-miles promotions are always offered on a time-limited basis, which begs the question: Should you purchase miles speculatively when you don’t have any trips in mind? We're going to run an example that might make you consider the benefit of hoarding the miles.

  1. The cost to purchase 1,000 Avianca LifeMiles is $33. Assuming that you managed to buy the miles with a 150% bonus, the cost per mile works out to 1.32 cents.
  2. A business class award ticket onboard All Nippon Airways for a nonstop flight from New York to Tokyo will set you back approximately $8,000 in cash.
  3. A round-trip business class LifeMiles redemption from North America to North Asia will set you back 156,000 miles plus roughly $100 in airport taxes.
  4. The cost of purchasing 156,000 miles at 1.32 cents each will come out to roughly $2,060.
  5. You’re saving nearly $6,000 if you buy the bonus miles, compared to buying the ticket in cash outright. Sold!

READ MORE: "Credit Card Rewards: How to Transfer Points and Get the Maximum Value from Your American Express Card"

Buying miles for a trip like Bali just might be worth it. (Photo by Artem Beliaikin on Unsplash)

The Takeaway

As you can see, buying miles for aspirational travel can provide great value. But be sure to follow this important advice:

  • Check to see if award seats are available before you purchase any miles
  • Always compare the price to a paid ticket to make sure that you’re getting the best deal possible.
  • If you're hoarding miles, be aware that the airlines reserve the right to increase or decrease the number of miles required for a trip. The lesson here: Try to use the miles right away.

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