American Selling AAdvantage Miles For 1.77 Cents Each

American has just launched their latest promotion on purchased miles, valid through December 15, 2018.

With this promotion you get a tiered bonus when you buy at least 12,000 miles in one transaction, as follows:

• Buy 12,000-24,000 miles, get 7,000 bonus miles
• Buy 25,000-34,000 miles, get 15,000 bonus miles
• Buy 35,000-49,000 miles, get 21,000 bonus miles
• Buy 50,000-74,000 miles, get 27,000 bonus miles
• Buy 75,000-99,000 miles, get 48,000 bonus miles
• Buy 150,000 miles, get 120,000 bonus miles

In this case you’ll receive the lowest cost per mile by purchasing exactly 150,000 miles. If you purchased that many miles you’d receive a total of 270,000 miles at a cost of $4,791.88, which is a cost of ~1.77 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.

As far as American’s bonuses and discounts on purchased miles go, in the past year the airline has charged anywhere between 1.72 and 2.13 cents per purchased mile, so this is very close to the lowest price we’ve seen during that period. American actually just had a Black Friday sale on miles, and it was for exactly the same price.

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, if you’re picked up miles for 1.77 cents each, that’s like paying ~$1,240 for a one-way Qatar Airways Qsuites ticket between the US and the Middle East/India.

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. If you’re spending 1.77 cents per mile, I’d consider the “real” cost to be closer to 1.62 cents per mile after factoring in the value of miles.

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 certainly circumstances under which it could make sense to buy them. This promotion is pretty close to being as good as promotions for purchased American miles get, so if you’ve been waiting for a good price, I’d consider buying with this deal.

If you buy miles for 1.77 cents each and pay with The Platinum Card® from American Express (which offers 5x points that I value at 1.7 cents each), it’s like you’re really paying ~1.62 cents per mile, by my valuation.

Do you plan on buying American miles with up to an 80% bonus?