American Selling AAdvantage Miles With A 50% Bonus

American’s latest bonus on purchased miles ended yesterday, and today the airline is launching a new promotion on purchased miles.

American’s new bonus on purchased miles is valid for purchases through January 31, 2019, and offers up to 50,000 bonus miles.

With this promotion you get a tiered bonus when you buy at least 5,000 miles in one transaction, as follows:

• Buy 5,000-14,000 miles, get 1,000 bonus miles
• Buy 15,000-24,000 miles, get 5,000 bonus miles
• Buy 25,000-49,000 miles, get 10,000 bonus miles
• Buy 50,000-69,000 miles, get 22,500 bonus miles
• Buy 70,000-99,000 miles, get 35,000 bonus miles
• Buy 100,000-150,000 miles, get 50,000 bonus miles

What makes this interesting is that usually you achieve the lowest cost per mile if you max out these promotions (meaning buying exactly 150,000 miles pre-bonus). Meanwhile with this promotion you achieve the lowest cost if you purchase exactly 70,000 or 100,000 miles, because in that case you’d receive a 50% bonus on purchased miles.

If you buy miles in either of those increments you’d end up paying a total of 2.15 cents per AAdvantage 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.

As far as American’s bonuses and discounts on purchased miles go, this is actually the worst promotion we’ve seen from them in over a year. In the past year American has otherwise charged anywhere between 1.72 and 2.13 cents per purchased mile during a promotion, so 2.15 cents per purchased mile is an awful deal. As a point of comparison, until yesterday you could buy miles for as little as 1.77 cents each.

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:

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.

For example, just recently I redeemed 75,000 AAdvantage miles for a one-way Qatar Airways business class ticket from Cape Town to the US, which I consider to be a spectacular value.

However, if you are going to buy miles, I’d recommend doing so when the price is closer to 1.72 cents per mile rather than 2.15 cents per mile.

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:

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.

Other great ways to earn American miles

There are lots of great ways to earn American miles aside from outright buying them. At the moment there are excellent welcome bonuses on co-branded American Airlines AAdvantage Cards, as follows:

• The CitiBusiness® / AAdvantage® Platinum Select® World Mastercard® is offering a welcome bonus of 70,000 AAdvantage miles after making $4,000 of purchases within the first four months; $99 annual fee, waived for the first 12 months
• The Citi® / AAdvantage® Executive World Elite™ Mastercard® is offering a welcome bonus of 50,000 AAdvantage miles after making $5,000 of purchases within the first three months; the card has a $450 annual fee
• The Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard® is offering a welcome bonus of 40,000 AAdvantage miles after making $2,000 of purchases within the first three months, plus another 10,000 AAdvantage miles after making $6,000 of purchases within the first 12 months; $99 annual fee, waived for the first 12 months
• The AAdvantage Aviator Business Mastercard is offering a welcome bonus of 50,000 AAdvantage miles after making a purchase and paying the $95 annual fee
• The AAdvantage Aviator Red World Elite Mastercard is offering a welcome bonus of 50,000 AAdvantage miles after making a purchase and paying the $95 annual fee

Bottom line

While I wouldn’t buy American miles without a specific use in mind, there are circumstances under which it could make sense to buy them.

Unfortunately this is the worst promotion we’ve seen on purchased miles from American in over a year, so if you are going to buy miles, this isn’t the promotion through which I’d recommend doing so.