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American has just announced their latest promotion on purchased miles, which comes about a week after their previous bonus on purchased miles ended. Through January 4, 2018, American is offering up to 120,000 bonus miles when you purchase AAdvantage miles.
With this promotion the number of bonus miles you earn is tiered, and based on how many you buy, as follows:
- Buy 10,000-24,000 miles, get 3,000 bonus miles
- Buy 25,000-49,000 miles, get 9,000 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 100,000-149,000 miles, get 72,000 bonus miles
- Buy 150,000 miles, get 120,000 bonus miles
To maximize this promotion you’ll want to buy exactly 150,000 miles (pre-bonus). If you do that, you’d receive a total of 270,000 AAdvantage miles at a cost of $4,786.88, 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 (pre-bonus).
As far as American’s bonuses on purchased miles go, this one is quite good. It’s identical to the Black Friday bonus they were offering on purchased miles about a week ago. Prior to that, American sold miles for as little as ~1.91 cents each in November. The best promotion we saw from American was back in July, when they sold miles for as little as ~1.72 cents each. So this isn’t that much worse than the best offer over the year.
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 earlier this year. 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 Class||First Class|
|Contiguous 48 U.S. States||25,000||50,000|
|Canada & Alaska||30,000||55,000|
|South America Zone 1||30,000||55,000|
|South America Zone 2||57,500||85,000|
|Middle East / India||70,000||115,000|
|Asia Zone 1||60,000||80,000|
|Asia Zone 2||70,000||110,000|
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 just under two cents each with a short term use in mind, though I wouldn’t load up at this price. I suspect we’ll see American offer a marginally lower price on purchased miles again sometime soon.
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:
- The Platinum Card® from American Express — 5x Membership Rewards points per dollar spent
- Premier Rewards Gold Card from American Express — 3x Membership Rewards points per dollar spent
- Chase Sapphire Reserve℠ Card — 3x Ultimate Rewards points per dollar spent
- Chase Sapphire Preferred® Card — 2x Ultimate Rewards points per dollar spent
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. To do the math differently, that lowers the real out of pocket to ~1.62 cents per mile.
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, as it’s among the lowest costs we’ve seen this year.
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?