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Since mid-November, American has been offering a bonus on the purchase of miles. Originally the promotion was just supposed to run through November 30, 2015, but they ended up extending the promotion through January 4, 2016.
American has just sweetened this promotion even further, and are offering the lowest cost per purchased mile I recall seeing in years.
Previously the biggest bonus you could get with this promotion was 75,000 bonus AAdvantage miles when purchasing 125,000 miles:
However they now added another tier, which represents the highest percentage bonus. Now if you purchase 150,000 miles you can receive 115,000 bonus miles. That represents a ~77% bonus on purchased miles.
That means you could purchase a total of 265,000 AAdvantage miles for $4,786.88. That’s a cost of ~1.81 cents per AAdvantage mile.
That’s the lowest cost at which I recall American selling miles in quite a while (though not as good as the rate at which US Airways used to sell miles back in the day), though admittedly the investment to get that bonus is also pretty huge. Spending ~$5,000 on miles is no small sum.
Should you buy miles for ~1.81 cents each?
The rate at which American is selling miles through this promotion is roughly in line with my valuation of AAdvantage miles. Generally I wouldn’t buy a mileage currency at the same cost I value it, since I’d rather have cash than miles. The one wrinkle this time around is that American is devaluing their award chart for bookings as of March 22, 2016, so in just over three months the value of those miles will decrease considerably.
Would I buy miles for ~1.81 cents each speculatively? Nope. Would I buy miles for ~1.81 cents each if I wanted to take my whole family to Asia in business class and didn’t have enough miles? At ~$1,000 one-way in Cathay Pacific business class with tons of availability, it’s certainly something I’d consider.
There are lots of similarly great uses of American miles, especially if you can book before March 22, 2016.
Which credit card should you buy miles with?
As of earlier this year, American processes mileage purchases directly (rather than through points.com), 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:
- Premier Rewards Gold Card from American Express — 3x Membership Rewards points per dollar spent
- Citi ThankYou® Premier Card – 3x ThankYou points per dollar spent
- Citi Prestige® Card — 3x ThankYou points per dollar spent
- Chase Sapphire Preferred® Card — 2x Ultimate Rewards points per dollar spent
- Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard® — 2x AAdvantage miles per dollar spent
- CitiBusiness® / AAdvantage® Platinum Select® World Mastercard® — 2x AAdvantage miles per dollar spent
This is the lowest cost I ever recall American selling miles, though you’re having to invest almost $5,000 to pick up miles at that rate.
I wouldn’t buy American miles speculatively at that rate, especially given the upcoming devaluation. But if you have a short term redemption in mind where you could redeem lots of miles (like for travel in first & business class on Cathay Pacific, Japan Airlines, Etihad, Qatar, etc.), this represents a great value. There are definitely circumstances under which this offer can represent a great deal.
Do you plan on buying American miles for ~1.81 cents each?