Expiration Date – August 5, 2015
American Airlines is offering up to 27,500 bonus miles when you buy or gift miles until August 5, 2015. But even with a bonus, buying miles doesn’t usually make sense.
American AAdvantage bonuses are generally offered based on tiered purchase levels and this bonus sale is no different. The more you buy, the larger the bonus. Miles are available in increments of 1,000 all the way up to 100,000 miles.
During this sale you will enjoy these bonus miles:
Buy 16,000-30,000 miles, enjoy 5,000 bonus miles
Buy 31,000-45,000 miles, enjoy 10,000 bonus miles
Buy 46,000-60,000 miles, enjoy 15,000 bonus miles
Buy 61,000-75,000 miles, enjoy 20,000 bonus miles
Buy 76,000-100,000 miles, enjoy 27,500 bonus miles
Without a bonus, to buy or gift American AAdvantage miles cost 2.95 cents for each mile, plus a 7.5% tax, which increases your cost to 3.17 cents. In addition you will pay a $30 processing fee per transaction.
With this offer the purchase price will range from 2.5 cents per mile for 100,000 miles to a whopping 6.2 cents per mile at the lowest purchase level of 1,000 miles (due mostly to the $30 transaction fee).
As you know from prior TRVLVIP Perks and Tips, we believe the value of an American AAdvantage mile is 2 cents per mile, which is the value we would be willing to pay for AAdvantage miles if we could buy them for cash. It is also the minimum value we feel you should expect before redeeming your miles.
So even if you buy 100,000 miles and enjoy 27,500 miles, equating to 2.5 cents per mile, you will pay more than what we believe AAdvantage miles are worth (2 cents per mile).
In order for the miles purchase to make good economic sense, you will need to use your miles to book an award ticket or upgrade where the value of each mile is more than what you paid for it.
Does it ever make good financial sense to buy or gift AAdvantage miles? Maybe – but typically only in one or more of these scenarios:
You plan to purchase miles in order to secure a specific award flight during a discounted award promotion
MileSAAver award space is available
You plan to secure a Business or First Class award ticket
Here is a quick calculation you can use to determine deal value:
Find an award ticket
Determine the full price of that ticket if you were to pay cash, including all taxes and fees
Add to that amount any taxes and fees you will be required to pay on the award ticket
Divide that amount by the number of miles required
If the value per mile exceeds the amount you have to pay to buy the miles then you’ve found a good deal and if not, we don’t suggest you buy the miles
Want to look a bit deeper into the option to purchase, gift or share miles with or without a bonus offer? See our great tip: American - Pros & Cons of Buying and Gifting Miles.
Click here to review award availability and to book award travel.
Remember, purchased miles will not count toward AAdvantage elite qualification.
It rarely makes sense to buy or gift miles speculatively as it is an expensive way to acquire miles even with a discount. Once you’ve picked a location and your dates and have taken the steps to ensure award availability, make the small effort to crunch the numbers to make sure the mile purchase makes good economic sense - you will be very happy you did!
And rather than purchasing miles to gift to another person, book them an award ticket using your miles instead. That is a much more economical choice.