American Is Selling AAdvantage Miles For About Two Cents Each

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Nowadays American almost continuously offers bonuses on the purchase of AAdvantage miles. Their last bonus on purchased miles ended yesterday, and they launched their next bonus today. Through American’s newest promotion on purchases miles you can receive:

  • Up to a 10% discount if you buy at least 20,000 miles in one transaction by February 8, 2018
  • Up to 42,500 bonus miles if you buy miles by February 16, 2018 (the two promotions can be stacked, so you’ll want to buy miles by February 8)

Here’s how this tiered offer works, assuming you buy miles by February 8:

  • Buy 20,000-39,000 miles, get 7,000 bonus miles plus 10% off
  • Buy 40,000-59,000 miles, get 15,000 bonus miles plus 10% off
  • Buy 60,000-74,000 miles, get 22,500 bonus miles plus 10% off
  • Buy 75,000-99,000 miles, get 30,000 bonus miles plus 10% off
  • Buy 100,000-150,000 miles, get 42500 bonus miles plus 10% off

Ordinarily you’ll achieve the lowest cost per mile through these promotions by buying the maximum number of miles, though this time around you can maximize the promotion by buying 100,000 miles, as you’d receive the equivalent of a 42.5% bonus plus a 10% discount. If you do that, you’d receive 142,500 AAdvantage miles at a cost of $2,884, which is a cost of ~2.02 cents per mile. You’d pay only marginally more on a per mile basis if you bought exactly 75,000 miles.

American has also made this promotion more deceiving than in the past. In the past once you selected the number of miles you wanted to buy and logged into your account, they’d show you the all-in cost. Now they don’t show you the all-in cost (including taxes) until after you enter your credit card, which is ridiculous.

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), though since it’s the beginning of the year, that limit was reset just over a week ago.

As far as American’s bonuses on purchased miles go, this one is about average. American’s last promotion offered miles for as little as ~2.13 cents each, so this promotion is better. However, in December we saw a promotion offering miles for just 1.77 cents each, which was significantly better. In fairness, that was one of the best promotions we had seen in a while.

Is buying American miles a good deal?

When American devalued their award chart in early 2016, 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 last year. Ever since the big devaluation, the cost of international first class awards went up in price by the most, by as much as 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 current 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 during a promotion with a short term use in mind, though I wouldn’t load up at this price. I suspect we’ll see American offer a 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:

CardPoints earned on airfare spend
The Platinum Card® from American Express5x Membership Rewards points per dollar spent
Chase Sapphire Reserve®3x Ultimate Rewards points per dollar spent
Premier Rewards Gold Card from American Express3x Membership Rewards points per dollar spent
Citi ThankYou® Premier Card3x ThankYou points per dollar spent
Chase Sapphire Preferred® Card2x Ultimate Rewards points per dollar spent
Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard®2 AAdvantage® miles per $1 spent on eligible American Airlines purchases
CitiBusiness® / AAdvantage® Platinum Select® World Mastercard®2 AAdvantage® miles per $1 spent on eligible American Airlines purchases


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.

Bottom line

While American miles aren’t as valuable as they used to be, there are still circumstances under which it can make sense to buy them. Roughly two cents per mile is about average as far as American’s bonuses on purchased miles go. I’m sure we’ll see a better promotion again soon, though with a short term use in mind there’s value to be had with this promotion.

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).

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Comments

  1. All these award charts, and no availability. American miles are a scam now. Even if I use them for partner awards getting a positioning fight is nearly impossible.

  2. “there’s a cap of purchasing 150,000 AAdvantage miles per account per calendar year (pre-bonus), though since it’s the beginning of the year, that limit was reset just over a week ago.”

    Just recycling AA miles posts these days??

  3. @ Ben – If you have the Barclay Aviator Silver card you earn 3X miles on AA purchases. If your goal is to maximize your AAdvantage miles, why not use it and earn another 7,965 AAdvantage miles? Using your example of buying 100,000 AAdvantage miles, that would bring your cost per mile down about 1.9 cents per mile.

  4. I need help. Since AA shows this as an airfare purchase, will you get the Chase Sapphire Reserve $300 annual travel credit on your credit card account in addition to the 3 x Ultimate Rewards if you purchase the AA miles with your Sapphire Reserve card? And if so, Ben, what would the return be on this strategy compared to the 8.5% return using the AMX Platinum Card. I have both the Chase Sapphire Reserve and the AMX Platinum card, so where would I get the best return? This is very confusing.

  5. I love this caption.

    “Qatar Airways business class continues to be a great use of American miles”

    That’s what it’s come to.

    On a separate note I thought the 5X from Amex plat was only on airfare through the Amex travel portal.

  6. @Old Flyer – Yes, CSR should deliver a credit up to $300 on the miles purchase.

    @steve – 5x points using an AMEX Platinum Card is also available when making a purchase directly from an airline.

  7. Two cents is easily twice what I would consider paying for this airline’s miles. I think the 1.3 cents valuation is itself inflated. I would need to see a public commitment to making a reasonable number of Saver awards available system wide over time, as they were a couple of years ago – not the pathetic to nonexistent availability of the recent past – before I would turn my attention to accumulating these miles again.

  8. @Brett — I agree that the program has become a scam, mainly because the award chart is now a scam. AA actually offers quite a bit of award availability (at least for premium international cabin redemptions) if you book at the AAnytime rate for AA metal or pay the carrier surcharges to travel on BA. On a Europe redemption that means you pay 110k miles each way for AA metal (and no surcharge) or 57.5k + $500 in surcharges for BA metal. At 1.3 cents per mile value, that fuel surcharge is the same as adding 38.5k to the mileage required. That means the actual cost of most business class seats to Europe is 96k each way, not 57.5k. In the end all the BA space with huge fuel surcharges is a just a band aid to cover up the fact that AA has converted all its own award seats to the AAnytime redemption rate. That’s the chart they should publish and advertise when they’re flogging credit cards on the plane.

  9. Boooked MIA-DFW-PEK/PVG-DFW-MIA 6 months in advance in coach, then tried to purchase upgrades with miles/$$. I was put on wait list, Business Class is still empty according to the seating chart…

  10. The complicated pricing structure of this new offer will put off many as on the surface it appears more mediocre than it actually is. The reality is nonetheless still wildly uninspiring, and I wonder whether AA really thinks they are offering a good deal. Too early in the new year to eat into the annual cap at this price!

  11. Availability, availability, availability….

    The whole thing is a scam if you can’t find any seats on flights you might actually want to take.

    I looked at LHR-MEL and LHR-SYD for October and November 2018. Practically nothing in F or J with Qantas. Most supposed availability turns out to be ridiculous 3 flight itineraries starting with BA to Japan….

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