Since American Miles Will Become Harder to Get, Should You Buy Miles Now While They’re Cheap?

A Facebook friend writes,

Since [redeemable miles] are going to be harder to earn in the future with my flying patterns [buying cheap tickets and American is going to start awarding miles based on ticket price rather than distance flown in about a year -ed], does it make sense to load up on miles with the current purchase promo?

I can get 1 M[illion] miles (spread among 5 family members) for about $18,000. I have a feeling that rising demand will push up the price on mileage purchases and you are not going to see 1.8 cents per mile ever again. Thoughts?

I say no.

Three reasons not to do this:

  1. American’s coming March 22 changes do not make their miles worth MORE. Miles are worth less, so if you wouldn’t spend 2 cents a mile before I think it would be a harder case now.

  2. We have seen American selling miles cheaper than before their merger with US Airways. They have come closer to following the US Airways model and remember that US Airways sold miles at 1.88 cents a mile 3/4ths of the year. So this probably isn’t the last shot.

  3. It’s easier for them to sell miles cheap going forward when the awards that are more costly for them to offer are more expensive to members. I’d say the announced changes make it more likely they can keep selling miles cheap rather than less likely.


American Airlines Boeing 787 Business Class

The best argument, I think, for buying miles ‘on the if-come’ (rather than top off an account for a specific award) is that we now know what the award chart is going to look like. Instead of buying on a guess about the future value of miles, we know what the price of awards will be. It’s unlikely that award routing rules will get more restrictive or that availability will get worse. So the value of American miles — while less than they used to be — are likely to be pretty stable.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. @Gary- Unrelated, but a huge thanks for your coverage of the Hyatt Diamond Match on Twitter last week. I happened to pull up BoardingArea on thursday night before bed, and quickly saw your post. Hit up HGP right away with HHonors Gold and IHG Plat, and they got back to me Saturday afternoon with my confirmed Diamond Status. It couldn’t possibly have come at a better time, as I’m planning a one year anniversary trip for my wife and myself–roadtripping through Europe. That status will easily save us $500 in food/amenities as we use 4 free nights (Chase Hyatt cards) at the PH Zurich, PH Milan, Hyatt Regency Nice, and PH Paris. Seriously, thank you–I really appreciate your work!

  2. Hi Gary,

    Love the blog and have been reading since 2013. In your opinion, what are the chances of AA becoming a transfer partner of Citi Thank You?

  3. @Jerome Zagala – Citi issues their co-brand credit card so it is strange that they HAVEN’T been able to make this deal, I always assume they will make it happen one way or another. On the other hand the current deal is 40% over, it lasts through end of 2018. So we’ll see if Citi keeps the deal and if they do a good shot they get this as a throw-in if it hasn’t happened before.

  4. I disagree that we can now count on the value of miles to stabilize. Delta has signaled clearly that they are going to continue to drive down the value of miles and will eliminate every possible outsized value opportunity for award travel. I believe UA and AA will continue to follow Delta’s lead, perhaps keeping just enough behind them to offer marginally better value for one’s miles (although in my experience, AA award miles requirements on their metal have now reached a point where they exceed Delta levels more often than not). In any case, I absolutely wouldn’t consider buying miles at this point at anything much over 1 cent a mile – and even at that price point I’d probably only do it to top off an account for a trip to be booked in the immediate future. It’s time to realize that miles earned and award dreams should no longer have any bearing on who you choose to fly and buying miles is going to almost never be a rational alternative to fulfill award dreams (unless you are one that would actually otherwise pay full “retail” price for premium tickets, but for most of us, that’s probably not rational either).

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