American has just announced the details of their latest promotion on purchased miles. Through April 28, 2018, American is offering up to 115,000 bonus miles when you purchase AAdvantage miles. This is one of their best deals on purchased miles in quite a while.
With this promotion you get a tiered bonus on purchased miles, and the bonus is bigger the more miles you buy:
- Buy 6,000-9,000 miles, get 1,500 bonus miles
- Buy 10,000-19,000 miles, get 3,500 bonus miles
- Buy 20,000-29,000 miles, get 7,500 bonus miles
- Buy 30,000-39,000 miles, get 15,000 bonus miles
- Buy 40,000-54,000 miles, get 22,500 bonus miles
- Buy 55,000-69,000 miles, get 30,000 bonus miles
- Buy 70,000-84,000 miles, get 40,000 bonus miles
- Buy 85,000-99,000 miles, get 50,000 bonus miles
- Buy 100,000-124,000 miles, get 60,000 bonus miles
- Buy 125,000-149,000 miles, get 75,000 bonus miles
- Buy 150,000 miles, get 115,000 bonus miles
In this case you’ll receive the lowest cost per mile by purchasing 150,000 miles pre-bonus. You’d receive a total of 265,000 miles at a cost of $4,786.88, which is ~1.81 cents per mile.
As usual, AAdvantage accounts less than 30 days old aren’t eligible to purchase miles. Furthermore, there’s a cap of purchasing 150,000 AAdvantage miles per account per calendar year (pre-bonus).
When it comes to American’s bonuses on purchased miles, this is one of the better ones we’ve seen in a while. American’s February promotion on purchased miles offered miles for as little as ~2.02 cents each, while their January promotion on purchased miles offered them for as little as ~2.13 cents each. So this is the best promotion on purchased miles of the year, by about 10%.
It’s not the best price ever, though. Last December we saw American sell miles for ~1.77 cents each, so that was only marginally better than this promotion.
Is buying American miles a good deal?
When American devalued their award chart in early 2016, my valuation of AAdvantage miles decreased from ~1.8 cents to ~1.5 cents each. My valuation of American miles has further dropped from ~1.5 cents to ~1.3 cents earlier last year. Ever since the big devaluation, the cost of international first class awards went up in price by the most, by as much as 70% in some instances.
Meanwhile the cost of most business class awards increased as well, though not nearly as drastically. As a reminder, here’s the cost of first and business class awards originating in the U.S. under the current program:
|Contiguous 48 U.S. To:||Business Class||First Class|
|Contiguous 48 U.S. States||25,000||50,000|
|Canada & Alaska||30,000||55,000|
|South America Zone 1||30,000||55,000|
|South America Zone 2||57,500||85,000|
|Middle East / India||70,000||115,000|
|Asia Zone 1||60,000||80,000|
|Asia Zone 2||70,000||110,000|
Qatar Airways business class continues to be a great use of American miles
I find the cost of business class redemptions to still be reasonable in most cases. There are instances where it could make sense to pick up miles during a promotion with a short term use in mind, though I wouldn’t load up at this price, even though this is the lowest cost that we’ve seen on purchased miles from American in a while.
Which credit card should you buy miles with?
American processes mileage purchases directly, which means the purchase of miles does qualify as airfare spend. Therefore you’ll want to consider using one of the following cards for your purchase, since they offer the following bonus miles for airfare spend:
|Card||Points earned on airfare spend|
|The Platinum Card® from American Express||5x Membership Rewards points per dollar spent|
|American Express® Gold Card||3x Membership Rewards points per dollar spent|
|Chase Sapphire Reserve®||3x Ultimate Rewards points per dollar spent|
|Chase Sapphire Preferred® Card||2x Ultimate Rewards points per dollar spent|
|Citi® / AAdvantage® Executive World Elite™ Mastercard®||2 AAdvantage® miles per $1 spent on eligible American Airlines purchases|
|CitiBusiness® / AAdvantage® Platinum Select® World Mastercard®||2 AAdvantage® miles per $1 spent on eligible American Airlines purchases|
|Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard®||2 AAdvantage® miles per $1 spent on eligible American Airlines purchases|
|American Airlines AAdvantage MileUp℠ Card||2 AAdvantage® miles per $1 spent on eligible American Airlines purchases|
Redeem American miles for JAL business class
For example, I value Membership Rewards points at 1.7 cents each, so I view that as an 8.5% return on this spend if you use The Platinum Card® from American Express. So if you used that card and paid ~1.81 cents per mile and valued the 5x points at 8.5%, that would lower your real cost of acquiring these miles to ~1.66 cents each, which is even better.
While American miles aren’t as valuable as they used to be, there are still circumstances under which it can make sense to buy them. This is the lowest cost we’ve seen on purchased American miles in 2018, and for that matter we haven’t seen much lower costs on purchased miles in the past year. There are definitely circumstances under which it could make sense to acquire American miles for ~1.8 cents each, and that value only gets better if you’re earning 5x points on that purchase by paying with The Platinum Card® from American Express.
If you are looking to buy miles, keep in mind that American allows five day award holds (meaning you can hold an award ticket, purchase miles, and then ticket the reservation).
Do you plan on buying American miles for ~1.8 cents each?