American’s latest bonus on purchased miles ended on January 31, and now the airline is launching a new promotion on purchased miles. They really don’t miss a bit when it comes to trying to sell miles at a discount.
American’s new bonus on purchased miles is valid for purchases through February 8, 2019, and offers up to 10% off plus up to 42,500 bonus miles.
With this promotion you get a discount when you purchase at least 20,000 miles in one transaction, plus a tiered bonus based on how many miles you buy, as follows:
- Buy 20,000-39,000 miles, get 7,000 bonus miles plus 10% off
- Buy 40,000-59,000 miles, get 15,000 bonus miles plus 10% off
- Buy 60,000-74,000 miles, get 22,500 bonus miles plus 10% off
- Buy 75,000-99,000 miles, get 30,000 bonus miles plus 10% off
- Buy 100,000-150,000 miles, get 42,500 bonus miles plus 10% off
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 100,000 miles.
If you buy 100,000 miles you’d end up paying a total of $2,889.13 and would receive a total of 142,500 miles, which is a cost of 2.03 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 one of the worse promotions American has offered. In the past year when American has offered promotions on purchased miles, they’ve charged anywhere between 1.72 and 2.15 cents per mile, so this is on the higher end of their pricing.
It is slightly better than the promotion they offered in January, where the lowest cost was 2.15 cents per mile (that was the worst promotion we had seen in a year).
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 |
| Hawaii | 40,000 | 65,000 |
| Caribbean | 27,500 | 52,500 |
| Mexico | 27,500 | 52,500 |
| Central America | 27,500 | 52,500 |
| South America Zone 1 | 30,000 | 55,000 |
| South America Zone 2 | 57,500 | 85,000 |
| Europe | 57,500 | 85,000 |
| Middle East / India | 70,000 | 115,000 |
| Africa | 75,000 | 120,000 |
| Asia Zone 1 | 60,000 | 80,000 |
| Asia Zone 2 | 70,000 | 110,000 |
| South Pacific | 80,000 | 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.
For example, 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 2.03 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:
| 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.
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:
Current American AAdvantage Offers
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 one of the worse promotions we’ve seen on purchased miles from American, so I wouldn’t take advantage of this unless you have an immediate use in mind for these miles.
Do the Amex airline incidental credits work with these purchases? Assuming of course that American is my selected airline.
I might not want to get off of a plane like that if I ride it. Why? I might feel too debonarish & aristocratic!
I keep wondering about all the hype with buying miles. Does anyone ever think about why they would offer miles for sales and offer a bonus? The reason is, that except for those who will use them quickly, they will devalue them and you loose whatever value the bonus was worth…same goes for hotel bonus programs. For those like Lucky who will use them probably within months they area good deal…sometimes. For those who plan to use them in a year or two they are a waste of money.
I notice how my 3.5million miles on AA have depreciated more from plan changes than from usage as when I planned to use this next egg I ended up caring for an elderly parent and cannot travel as I planned. I just see, especially with AA, the value of them is going away fast with limited use.
How about Citi Prestige for 5X miles?
The first two very ordinary sales for 2019 are squarely aimed at those who have maxed out their miles stash in 2018 and were waiting for the new year to tick over, and buy some for possible near-term travel.
As there is an annual cap (why??) of 150,000 it makes sense for most to sit back and wait for a good or great sale later in the year to extract maximum value.
If the need arises unexpectedly you only need to wait a week or so from one sale to the next.
Yes, where is Citi Prestige for 5X mile or CIti Premier for 3X miles?
I’m a buyer even for 2 cents / mile.
Just redeemed CX TLV-HKG-SGN for 40,000 miles in C ! (50$ in taxes).