American has just announced their latest promotion on purchased miles, which comes just two days after American’s previous bonus on purchased miles ended. Through November 2, 2017, American is offering up to 35,000 bonus miles plus a 10% discount when you purchase AAdvantage miles. By the way, how is it already October?!?
While you get 10% off as long as you purchase at least 20,000 miles, the bonuses are tiered, and you earn more bonus miles the more you buy, as follows:
- Buy 20,000-39,000 miles, get 7,000 bonus miles plus a 10% discount
- Buy 40,000-59,000 miles, get 13,000 bonus miles plus a 10% discount
- Buy 60,000-79,000 miles, get 20,000 bonus miles plus a 10% discount
- Buy 80,000-99,000 miles, get 30,000 bonus miles plus a 10% discount
- Buy 100,000-150,000 miles, get 35,000 bonus miles plus a 10% discount
Usually the way to get the lowest cost per mile is to buy as many miles as possible, though that’s not the case during this promotion. This time around if you bought as many miles as possible you’d receive 185,000 miles (150,000 miles plus 35,000 bonus miles) for $4,311.19, which is a cost of ~2.33 cents per mile. That’s terrible, especially given that last month you could get 235,000 miles for the same price.
The best cost per mile comes if you buy exactly 80,000 miles, meaning you’d get 110,000 miles after the bonus. That would cost you $2,313.30, which is a cost of ~2.1 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).
For the past several months American has been offering better promotions on purchased miles. A couple of months back it was possible to buy miles for as little as ~1.72 cents each, while last month it was possible to buy miles for ~1.83 cents each. So when the lowest cost per purchased mile is 2.1 cents, that’s not very good.
Is buying American miles a good deal?
When American devalued their award chart early last year, 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 in the past few months. With American’s big devaluation it’s international first class award redemptions that went up in price most, with awards increasing in price by up to ~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 new 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 certainly instances where it could make sense to pick up miles for about two cents each with a short term use in mind, though I wouldn’t load up at this price. We’re likely to see American sell miles for less in the near future.
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:
- 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® Card — 3x Ultimate Rewards points per dollar spent
- Chase Sapphire Preferred® Card — 2x Ultimate Rewards points per dollar spent
Redeem American miles for JAL business class
While American miles were more valuable early last year, there are still circumstances under which it can make sense to buy miles. With a short term use in mind I wouldn’t hesitate to buy miles through this promotion, though this is the highest cost promotion we’ve seen from American in a long time, and I imagine we’ll see a more attractive promotion again soon. So if you can wait, I would.
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 through this promotion?