Why You Should Avoid American’s Current Sale On Purchased Miles

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American has just announced their latest promotion on purchased miles. Through September 30, 2017, American is offering up to 50,000 bonus miles plus a 10% discount when you purchase AAdvantage miles. This promotion only lasts for a few days, but is one of the worse buy miles promotions we’ve seen from American in a while, so I wouldn’t recommend taking advantage of this.

While you get 10% off as long as you purchase at least 20,000 miles, the bonuses are tiered, and you earn more bonus miles the more you buy, as follows:

  • Buy 20,000-39,000 miles, get 7,000 bonus miles plus a 10% discount
  • Buy 40,000-59,000 miles, get 15,000 bonus miles plus a 10% discount
  • Buy 60,000-74,000 miles, get 22,500 bonus miles plus a 10% discount
  • Buy 75,000-99,000 miles, get 30,000 bonus miles plus a 10% discount
  • Buy 100,000-149,000 miles, get 42,500 bonus miles plus a 10% discount
  • Buy 150,000 miles, get 50,000 bonus miles plus a 10% discount

Usually the way to get the lowest cost per mile is to buy as many miles as possible, though that’s not the case during this promotion. This time around if you bought as many miles as possible you’d receive 200,000 miles (150,000 miles plus 50,000 bonus miles) for $4,311.19, which is a cost of ~2.16 cents per mile. That’s not good, given that during the last promotion you could get 235,000 miles for the same price.

The best cost per mile comes if you buy exactly 100,000 miles, meaning you’d get 142,500 miles after the bonus. That would cost you $2,884.13, which is a cost of ~2.02 cents per mile. That’s not great, though is better.

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 (pre-bonus).

For the past several months American has been offering better promotions on purchased miles. A couple of months back it was possible to buy miles for as little as ~1.72 cents each, while last month it was possible to buy miles for ~1.83 cents each.

Is buying American miles a good deal?

When American devalued their award chart early last year, 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 in the past few months. With American’s big devaluation it’s international first class award redemptions that went up in price most, with awards increasing in price by up to ~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 new program:

Contiguous 48 U.S. To:Business ClassFirst Class
Contiguous 48 U.S. States 25,00050,000
Canada & Alaska30,00055,000
Hawaii40,00065,000
Caribbean27,50052,500
Mexico27,50052,500
Central America27,50052,500
South America Zone 130,00055,000
South America Zone 257,50085,000
Europe57,50085,000
Middle East / India70,000115,000
Africa75,000120,000
Asia Zone 160,00080,000
Asia Zone 270,000110,000
South Pacific80,000110,000


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 certainly instances where it could make sense to pick up miles for about two cents each with a short term use in mind, though I wouldn’t load up at this price. We’re likely to see American sell miles for less in the near future.

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

Bottom line

While American miles were more valuable early last year, there are still circumstances under which it can make sense to buy miles. With a short term use in mind I wouldn’t hesitate to buy miles through this promotion, though this is one of the higher cost sales we’ve seen. I suspect next month American will offer a more attractive promotion on purchased miles, if you can wait.

If you are looking to buy miles, keep in mind that American allows five day award holds (meaning you can hold an award ticket, purchase miles, and then ticket the reservation).

Do you plan on buying American miles through this promotion?

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Comments

  1. To me AAdvantage miles would be a hard sell at 1 cent each. I value them at 1.2 and my purpose isn’t really to get a mild discount on value. I unsubscribed from their emails for lack of interest in their “offers” for their spectacularly devalued product.

  2. @Mike4567. YES, but you have to call AA reservation. They will NOT charge you the $25 agent-fee, because you cannot make that reservation via AA.com

  3. You keep using the word “spend” incorrectly. I think the word you are looking for there is “spending”. 🙂

  4. It’s annoying how many of AA’s key partners aren’t searchable or bookable from the website, with CX being the prime example.

    and of course, pretty much every single award change/redeposit transaction involves calling in / Twitter DM. they really should add some self-service functionality.

  5. Why buy more miles that are virtually unusable from any practical standpoint ? If American thinks this devaluation will drive loyal Advantage members to buy tickets they are right, I just bought 2 r/t FC tickets ATL-LAX. On United ! Why reward AA ???

    Their pricing logic is absurd. Am award ticket on AA from DFW to ATL on a Friday is 50,000 miles. The same ticket can be bought for $ 118. On American !
    Surely the people at AA read your blog (and others) so maybe they will listen. I can’t be the only member that is going this route.

    Chris in Atlanta
    5MM miles, lifetime Platinum.

  6. I’d rather invest in a good old hard currency with a proven devaluation at a less drastic rate. Mexican Pesos for me.

  7. Chris said the flight from DFW to ATL costs $118.00 or 50000 AA miles. So AA is saying their AA miles are worth 0.00236 cents per mile.
    So why is AA selling miles at 2.03—2.16 cents each? When they admit (above) THEY THINK their miles are worth 0.002 cents each.
    Question: What would someone do with these miles if she/he got them?

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