My gosh, after coming back from a 2+ week vacation (the longest I’ve ever taken), I’m basically braindead. I’m a numbers guy, but for the life of me my logic is utterly failing me, even when I have a pen and paper in front of me.
Just yesterday I posted about how I plan on taking advantage of Delta’s 100% mileage transfer bonus, essentially creating an opportunity to earn Delta miles at around 1.1 cents each.
Delta miles are funny. On one hand they’re the least valuable mileage currency, but on the other hand they’re often the best positioned for the most difficult award redemptions. V Australia business class to Australia is only 150,000 Delta SkyMiles, and they have excellent availability. Air Tahiti Nui or Air France business class to Tahiti is also 150,000 Delta SkyMiles. Air France business class to Mauritius, which I’ve been tempted to visit for a long time, is only 120,000 miles. And even a ride in business class on the Korean Air A380 to Asia is 120,000 miles. Or I can redeem a roundtrip coach ticket from Tampa to Atlanta on Delta for only 236,000 SkyMiles. 😉
So while Star Alliance miles and OneWorld miles are generally much more valuable, Delta miles would allow me to have several new experiences that I couldn’t really have through Star Alliance or OneWorld.
The other funny thing is that I actually have faith in Delta SkyMiles. The general advice is to never buy miles without a specific redemption in mind, and I usually totally agree with that. That’s why I have a hard time taking advantage of US Airways’ 100% bonus on purchased miles promotion unless I have a redemption planned within the next couple of months. Because US Airways miles are too good to be true, I always have the suspicion in the back of my mind that they’ll double their award chart from one day to the next (maybe that’s extreme, but I wouldn’t put it past them).
Delta miles, not so much, especially after last week’s further devaluation. So perhaps it’s twisted logic, but the miles are already considered to be the least valuable, to the point that I can’t imagine them further devaluing miles substantially. I suppose there’s comfort in being the worst.
With that in mind, I do plan on taking advantage of this promotion, and I’m looking for a math whiz to help me out here. Usually I’m sharp with numbers, though my brain still hasn’t recovered from my trip (the only phrase constantly going through my mind is “how is my pressure?”).
Through Delta’s 100% transfer bonus promotion you pay one cent per mile transferred, plus a $30 transaction fee for every chunk of 30,000 miles transferred. What I found out from the comments section on yesterday’s post is that you can actually transfer miles to multiple accounts under the same transaction fee. In other words, if I have 30,000 miles to transfer, I can transfer 30,000 miles to a single different account and pay $330 (one cent per mile plus the $30 transaction fee), or transfer 10,000 miles to three different accounts and still pay the same.
As of yesterday my plan was as follows, given three accounts with 25,000 miles, 43,000 miles, and 133,000 miles:
Therefore my plan would be to transfer 25,000 miles to the account with 43,000 miles, at a cost of $280 (one cent per mile plus the $30 transaction fee). Then there would be 93,000 miles in the account (43,000 miles that were in there, plus the 25,000 miles transferred, plus the 25,000 mile bonus). Then I would plan on transferring 90,000 of those miles at a cost of $990 to the account with 133,000 miles in it.
I would then have 313,000 miles in the account (133,000 miles that were in there, plus the 90,000 miles transferred, plus the 90,000 mile bonus).
My total out of pocket would be $1,270, and I would gain 115,000 miles. In and of itself that’s not a bad deal, though more importantly my miles would be better positioned for redemptions. Instead of having miles in three different accounts, I would have over 300,000 miles in a single account, more than enough for two business class tickets to Australia on V Australia (or to a ton of other destinations)
Of course at the time I hadn’t factored in that I could transfer miles to multiple accounts in a single transaction.
With that in mind, I actually have four accounts. One with 4,000 miles, one with 25,000 miles, one with 43,000 miles, and one with 133,000 miles. I’m looking to get as many miles as possible into the largest account, though am trying to figure out how best to maximize it. Obviously the way to do that would be to constantly transfer as close to 30,000 miles per transaction as possible, since the cost that varies is the $30 per 30,000 mile transaction fee, while the cent per mile transfer fee is constant.
With each transfer the miles get doubled.
So economists and mathematicians, how do I maximize the value of these transfers? I’ve literally sat here with a pen and paper for 30 minutes, though I’m going nuts. I don’t mind transferring back and forth multiple times, and I’m even wondering if using that 4,000 mile account would add any value.
So can anyone beat the deal in the quoted area above?
The winner gets the title of One Mile at a Time Math Whiz (don’t try it as a pick up line, trust me).