American AAdvantage’s Best Price On Purchased Miles Of The Year

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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 ClassFirst Class
Contiguous 48 U.S. States 25,00050,000
Canada & Alaska30,00055,000
Hawaii40,00065,000
Caribbean27,50052,500
Mexico27,50052,500
Central America27,50052,500
South America Zone 130,00055,000
South America Zone 257,50085,000
Europe57,50085,000
Middle East / India70,000115,000
Africa75,000120,000
Asia Zone 160,00080,000
Asia Zone 270,000110,000
South Pacific80,000110,000


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:

CardPoints earned on airfare spend
The Platinum Card® from American Express5x Membership Rewards points per dollar spent
American Express® Gold Card3x Membership Rewards points per dollar spent
Chase Sapphire Reserve®3x Ultimate Rewards points per dollar spent
Chase Sapphire Preferred® Card2x 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℠ Card2 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.

Bottom line

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?

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Comments

  1. Wouldn’t the Barclaycard / AAdvantage Aviator Red earn 2x AAdvantage Miles and the Aviator Silver earn 3x AAdvantage Miles for this purchase?

  2. Qatar business is a great redemption however availability has been non existent from USA in Qsuites or anywhere else other than PHL

  3. the good old day not too long ago, the annual cap is 60k miles w/o bonus.
    says a lot how the miles dynamic has changed.

  4. I’m going to buy a small amount for an upcoming trip to Dubai where I’m just a bit short on the round trip, but I’m certainly not spending $5K.

  5. William C. and Jeffrey King…additionally, the Barclay Aviator Silver card would earn 3X…and would be almost 20% of the way toward 3,000 EQD (as well as almost 15% of the way toward a companion pass).

  6. As a practical matter, all the space AA offers to Europe in premium cabins now is on BA metal with $500-$600 surcharges in each direction. At 1.8 cents per mile that means your real award price on a business seat to Europe is 87,500 and a first seat is 115k each way.

  7. Barclay Aviator cards are never mentioned here. My guess is no compensation from Barclay = no mention on this site.

  8. Hi, u mentioned 5X Membership Rewards® points on flights booked directly with airlines or with American Express Travel does it mean that it applies on buying miles too or just air fair?

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